"Luckily this seems a temporary issue for proper websites because HTML5 will work correctly without any stupid little tag."

That isn't entirely accurate. What IE8 will do is use IE8 rendering automatically for documents with "unknown" DOCTYPEs, including the HTML5 DOCTYPE. However, until the beta for IE8 is released, we'll have no way of knowing how our pages will render correctly in the new mode, and HTML5 is still in development as a standard and largely unimplemented.

By contrast, we know exactly how IE7 renders, and we have well-established methods of writing standards-based pages that display acceptably in IE7. In fact, my understanding is that IE8 will be Vista-only, so we'll have to continue to support IE7 rendering for the considerable future, especially considering how Microsoft has been forced to continue selling XP along side of Vista.

Therefore, I would conclude that the best approach is the following:

1) If you're not using HTML5 features, continue to write standards-compliant, HTML 4.01 Strict, validating web pages that have been tweaked to render acceptably in IE7.

2) If you need to use HTML5 features, build HTML5-compliant pages that use only the broadly-implemented new features. Tweak them to display acceptable in IE7, then add the new <meta> tag stitch to ensure IE7 rendering in IE8.

You may be wondering why we wouldn't want to use IE8 rendering mode. Well, unless IE8 will render standards-based pages without alteration (other than a meta tag) as easily as its competition (Firefox, Opera, Webkit, etc.), there really isn't any reason to bother. It's really just on more rendering mode to support, and thanks to the new <meta> stitch, we don't have to support it.

Microsoft hasn't merely damaged their PR with the developers. They've also made it cheaper (labor-wise) for those same developers to not support IE8 than to support it. And when you throw in the fact that Silverlight works on all major browsers, you can only conclude that Microsoft has managed to make IE8 irrelevant.