Hi Saurabh,
Please check note 1397488 - IE8 release for SAP CRM 2007 and SAP CRM 7.0. According to the note: SAP CRM is released for IE8 for CRM Web UI with CRM 2007(sp07 and above) and CRM
7.0(sp05 and above).
If you are on SP04 there might be a problem
Best regards
Niels