I updated to ie8 browser the other day at my work machine and afterward the graphics redraw was really slow on the Windows desktop. Windows that were moved around had massive amounts of trailing. After doing some research I found that others were having the same issue. The desktop has two web windows on it that I use to track weather radar and periodically refresh. After I went into the Display properties and unchecked the usage of the web windows and then applied the change the problem seemed to have gone away. There was also a large image file used as a background for the desktop. I reverted back to one of Window's images for the desktop background. I also reset the Display properties web windows to display. Afterward there was no problem with the redraw issue.
Conclusion: Before updating to IE8 if you are using XP Pro turn off any special desktop settings and then after reboot reset the desktop to the way you had it prior to updating.