I just finished installing IE8.
I believe the important thing is to prepare IE 7 for the update to IE8. You have to open IE 7 and reset the IE options in the Advanced tab before you install IE 8.
I also installed IE 8 through the update site and selecting the IE 8 update instead of using the Download site.
On checking the ADD/REmove programs in control panel I only see IE 8. Which is great.
On my other computer I still have both listed. Should I try and delete IE 7?