Microsoft recently announced that the latest dev builds of Internet Explorer 8 pass the Acid2 test. The Acid 2 test is designed to test various scenarios of CSS compliance. What is significant about this is seeing a level of support that possibly matches or exceeds other browsers.
Exceeds? Okay, it's hard to look at one little test and think that IE is going to surpass all the browsers. And in many ways, it won't. First, let's look at what we do know about the next version.
What we know
Trident, the rendering engine that's been with Microsoft since IE4 will still be there for IE8. However, the engine apparently consists of a few different parts, one of which is the layout engine. The layout engine has been rewritten. That should mean no more hasLayout.
Confirmed by Microsoft as a result of the Acid2 test is the support for the table display types which can allow for straightforward column layouts (although I'd argue you lose the ability to control source order in this case, if that's important).
We also get support for data URLs. This can be handy for embedding image data in the HTML or in the CSS document directly, instead of needing to reference an external file.
There's also support for generated content (using :before and :after, for example). The ABBR tag has been fixed (it'll show the dotted underline and allow title attributes to be set). Object element fallback will also be available. We should also be able to assume proper support for inherit, as well.
With the new layout engine, this may give them the opportunity to jump the gun on some future specifications such as grid positioning.
I don't think XHTML support will be in there. I personally don't think that's a bad thing but I know there's plenty of people clamouring for it. Don't expect SVG or Canvas support either.
On the DOM side, I'd love to see mutable DOM prototypes (like HTMLElement) but I suspect this is more of a core issue that would've required some serious rewriting. I predict it won't be in there.
The IE8 Standards Mode
Microsoft has said that there will be an IE8 standards mode. This is different than the standards mode that's in IE6 and 7, which is triggered simply by using a DOCTYPE. This will be some other opt-in mechanism. It will not be the end users responsibility to flip this switch on (as many people in the comments of the IE blog seem to think). This will be up to the web developer coding the page to specify that the page will use the new standards mode.
In all likelihood, this'll be a custom bit of HTML, such as a meta element that declares the page (and subsequent CSS and JScript) to use the newer features.
Microsoft has been stressing this repeatedly in saying that end users have an expectation that a web site will work the same from one version of a browser to the next. If the site breaks, they blame the browser. I can respect that.
The part that scares people is the thought of including proprietary markup every time another browser version is released.
When can we expect it?
They'll be showing stuff off at MIX which is still over two months away. Whether that will mean a beta or just a demo remains to be seen. I'd honestly hope it'd be the first beta release with another beta by mid to late summer. That'd mean a new IE8 could be in the hands of consumers before Christmas 2008.
Hopefully by then, we'll be close to forgetting about IE6.