According to quirks mode, internet explorer 8 does support table options for display property, but in this example it exhibits very strange behaviour
http://jsfiddle.net
After adding the bounty, I ended up working around this problem by targeting my CSS to IE8. I was already using Paul Irish's technique of adding classes to the element using conditional comments:
So all I had to do is add an extra CSS rule for IE 8 and lower:
.img-container { display: table-cell; } /* IE9+ and other browsers */
.ielt9 .img-container { display: block; } /* IE8 and lower */
Coupled with the techniques for vertically centring images, this gives me a nice cross-browser solution.