I wasn't in compatability mode...I thought. Then I saw that Toodledo was listed under "Websites you've added to compatability view". Not sure when or why I added it, but it was there in the list. Nice catch, and thanks for the help! The Outline tab displays perfectly now.
IE8 no longer causes a crash, but still has a formatting issue. Outline items are "left justified" and appear too far to the left (positioned on the grey bar). This makes the completion check box appear in the middle of outline items. Thanks for your work on this issue, Jake!