IE8 is giving lots or people major problems. The 500 error is minor. IE crashing is common and some users have lost their access to the Internet even via other browsers.
Most problems are due to plugins and add on software that are not compatible with it. The popular free anti-spyware program Spybot has been identified as a problem.
Unfortunately reverting to IE7 often does not cure the woes.
First advice is don't install IE8 at all but I guess that is too late.
Revert to IE7.
Remove all software associated with browsing.
Decide how many add ons are really so important to you.
If you really want to try IE8 again then install it before reinstalling any of the add on software. Be sure to download the latest installer for your add on software.