Windows XP and IE8 are fine together.
The new IE9 is not compatible with Windows XP so you will not be offered that browser update for your system.
Not sure what you mean by IE8 Updates. I wonder if you mean Windows Updates?
There is nothing to stop you from using other browsers in XP, and just leaving IE8 where it is. No need to downgrade, and no need to uninstall. Not sure why you are using Firefox portable, but there is the full Firefox browser as well as many others. They will all sit happily together in the OS.
I just heard something just a few minutes ago and now I want to find out info about it. I heard that IE8 and Windows XP doesn't get along very well. Is this actually true and should I downgrade to IE7? I have IE8 on my WinXP and it seems to work fine. Although alot of the times when I update IE8 updates, after a reboot, my PC seems to hang, slow down or just stall all together. Other ppl experience the same thing aswell. Do any of you have the same issues or been feeling the same way? I hate to use IE in the first place I like to use Firefox Portable. So downgrading wouldn't matter to me. Although If I do downgrade, what would that do to my internet experience since they are going to Web 2.0?