Is windows 7, the best operating system of all time.
That would be a "No". You can't say it is the absolute best. That would take quite a strong argument.
While XP is the classic that everybody will try to hold on to, Windows 7 is what everybody will (and should) be going to. It's just better. It has the speed of XP with more shine than Vista, and much better reliability than Vista.
But I wouldn't call it the best. Yes, XP does hold a few things over Windows 7, like program compatibility (but even now, there are ways around that like: XP Mode, Program Compatibility Assistant, etc...). I've only experienced 1 program that is completely incompatible with Windows 7. Everything else runs like a dream. Pretty much everything that ran in Vista, will run in 7 (along with most XP programs, but not all).
But there is just so much more there in 7 than there was in XP. Check here for a comparison.
I run Windows 7 on both my laptop and netbook, and I can honestly say that I will never go back to Vista or XP.
As for IE8, yes, it sucks terribly. I started using Firefox before IE8 came out, and I'm glad I did, because IE8 is one of the worst browsers I've seen, to date. Every page is "broken" unless you use "Compatibility Mode" on it. What was the point of making the browser more "advanced" if it just makes it harder to browse? Firefox wins here by a long shot.
But yeah, I would be hard pressed to say Windows 7 is the best. It has its pros and cons like anything (thankfully more pros than cons), but it's where the future of PC's are headed. Thankfully, for now, it's in a good direction.