on 'both' computers?
That would suggest two things to me, malware attack that spread on the home network, or some display settings change that doesn't work with IE8.
Your display settings are, er.. unusual anyway, but the image you gave seems to show some color conflict in menu bars. In that image I can see the Home button, (the little house), is on a black background, but there seems to be some sort of background behind that. Is there a theme here somewhere?
has lost toolbars in wife's laptop running XP Pro SP3. Note the picture
See the toolbars that are blacked out? It's also happened on my desktop. I unstalled IE8 and reverted to IE7. Looks perfect. I reinstalled IE8 and the blank areas are back.
IE is pissing me off.