IE8 does not support SVG in any way (without additional libraries such as SVGWeb), so you wonβt be able to make it work regardless of your markup.
Although the method you describe works well, I personally prefer to include SVG inline in XHTML, as it allows me to mix CSS styles for HTML and SVG together and provide a complete mix of JavaScript. I have an example of this here: http://phrogz.net/svg/3-point-circle.xhtml
Be sure to submit .xhtml files as Content-Type:application/xhtml+xml from your web server.
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