I found a compatibility issue between Drag'n'Drop Uploads and the Tagging module in Internet Explorer 8. I'm not using Google Gears and don't have it installed, but when I load the node edit page in IE8 I get a page error related to Drag'n'Drop module. This appears to cause a problem for the Tagging module (also used on the page). I'm not sure where exactly the fault lies. Cross posting issue here and in Tagging module queue - Issue.

My IE8 version is 8.0.6001.18702. For now I've disabled Drag'n'Drop uploads.