IE 8 issues with dialogs

Is is me or is there issues with IE 8 and Dialogs

http://demo2.paperhat.net/inc/modules/e ... skins.html

click on the "image" button, it seems the styles are all messed up, but i did get a decent dialog once i had to add a smiley then go to image properties and then the next time i used the dialog it was fine, also if kama is above it in the list of elements it also seems to work ok

its driving me nuts