I have the same symptoms as the original poster: Let's say after a reboot I open 1 window with 5 tabs and it consumes 200MB memory. I use it a few hours, maybe open more tabs, close them and return to same initial 5 tabs. Now IE is using 700MB. That just ain't right!

Can "fix" by closing all IE and reopening to original 5 tabs.
Windows 7 PRO x64, 4GB RAM never more than 3GB total utilized. MSIE8. All known patches & updates applied.
I did not install the special patch referenced because it does not fit my symptoms. (How does one know if he's using XML switching anyway?). I did briefly try other browsers, Opera & Chrome, and they don't seem to behave this way, although they each have their own weirdness I don't particularly care for. I tried MSIE9 and had some issues (I forget now the details) but bottom line I went back to IE8.
I am using a couple of add-ons... will test without them and report back. Meanwhile, any other ideas?
UPDATE 1: Ok, I disabled all add-ons. Opened IE with the usual 5 tabs. Memory usage by IE =
190MB. I went away for 90 minutes. Didn't touch a thing. Now IE is chewing up
330MB. So it seems a) it's not caused by add-ons, b) it's not caused by my use of the app and c) the suggestion to reboot every once in a while is completely useless.
UPDATE 2--
CAUSE: Well whaddayaknow?
Facebook.com is the culprit. Probably should have guessed that right out of the box.

FB is one of my 5 "standard" tabs. I tested with the other 4 tabs and memory was stable for hours at 130MB. Next test with only FB: let the leakage begin! If you google for "facebook memory leak" you'll find tons of stuff. This link was pretty enlightening, esp. for the web designers out there:
http://gent.ilcore.com/2011/08/findi...ory-leaks.html
It goes into diagnostic tools to pinpoint which element of a webpage is leaking. Above my paygrade.
WORKAROUND: So I guess the thing to do is to just close and reopen the Facebook tab once in a while. Beats rebooting and also beats closing/reopening the whole browser window.