your master file table is corrupt.
you can try to run windows recovery console and run chkdsk /r: http://support.microsoft.com/kb/307654
if you have your windows installation disc(s) you can also try doing a repair install.
ps: downloading/installing ie8 was not the cause of this problem. most likely the issues you're having with ie8 were caused by this the mft corruption.
Downloaded IE8- nothing but headaches since. Am now getting the above error message. it also says to run "Chksdk utility". Tried that, but when I reboot, the scan starts then abruptly says "cannot access volume NTFS, scan complete" Am I looking at a major problem?
Any help would be appreciated. Thanks