Hm...I have IE 8.00.6001.18241, and the CHM viewer seems to work happily on SQL Doc 2.0 output, using the rendering DLLs from this version of IE.
Can you let me know:
1) what doesn't work for you? Is the CHM totally unviewable, or are there specific rendering problems?
2) what version of IE8 you are using?
Red Gate Software