I think By "deleting" the Older version you have as you say Deleted your Bookclubs/bookMarks /Favorites

As I understand it I think you have to overwrite IE7 (and there is an option to restore back to IE7 if you wish)
So I think the only thing to do (damage limitation) is reinstall IE 7 OK
IE 8 is still Not 100% ready
Click this link
www.microsoft.com/windows/downloads/ie/getitnow.mspx Now Look for a Message
like this at the Bottom of this Page
quote:
Get Internet Explorer 7
Based on your operating system, the version of Internet Explorer 7 below is best for your computer.
Internet Explorer 7 for Windows XP Service Pack 2 (SP2)
This is the most common version for use with Windows XP Professional Edition SP2 and Windows XP Home Edition SP2.
The
Green Download button is under this Message in the left corner
May say something else for your setup but it will be the correct advice
Download is about 16MB for IE7 (Won't take long)
Put it this way, this link will give you the Version which is Suitable for your setup
As for the "missing" Volume Control Icon
Go into the Control Panel (on the Start menu)
Locate/click the Icon
Sounds and Audio Devices Properties Now all you do when the window opens is Tick the
Place Volume icon in the Taskbar box Also move the Volume to High and make sure the Mute box is unticked
Next Click the Apply Button then the OK button to Save the settings and Close the Window

DO Try the System Restore First. Go back to the 1st Highlighted date before you Installed IE8
You may get some of your bookmarks back (No guarantee)