I could not reproduce the error after I stripped my html to the
essentials. The following code does work in IE8, both in IE8 mode and
IE7 mode, with jQuery 1.2.6 and 1.3.1:

<!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Strict//EN" "http://
www.w3.org/TR/xhtml1/DTD/xhtml1-strict.dtd">
<html xmlns="http://www.w3.org/1999/xhtml";>
  <head>
    <meta http-equiv="Content-Type" content="text/html;
charset=utf-8" />
    <script type="text/javascript" src="http://ajax.googleapis.com/
ajax/libs/jquery/1.3.1/jquery.min.js"></script>
    <script type="text/javascript">
      $(document).ready(function(){
          $('#edit-keys').val($('#edit-keys').val().replace('
type:product', ''));
      });
    </script>
  </head>
  <body>
    <form action="/search" accept-charset="UTF-8" method="post"
id="search-form" class="search-form">
      <label>Enter your keywords: </label>
      <input type="text" maxlength="255" name="keys" id="edit-keys"
size="40" value="shirt type:product" class="form-text" />
      <input type="submit" name="op" id="edit-submit" value="Search"
class="form-submit" />
    </form>
  </body>
</html>

I guess this must have been caused by other scripts or bad markup, so
we probably shouldn't worry about it. John and David, thanks for
looking into it.
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