The latest updated code is here: http://pastebin.com/TJweMgtL
Starting from the left, IE 8, Chrome, Firefox 5.. you can see that only IE8 can display h1
It's not the rendering of a H1 in a nested section that makes the H2 bigger... it's just that browser manufacturers think/agreed, that beneath web editors, producers and developers the h2 is commonly treated as the visual more important heading! Nothing about outline rendering here!
See my example here: http://pastebin.com/yJ1vzEjj
For IE8 is NOT doing it, is just showing that these convention just hasnt arrived at Microsoft headquarters yet... again its a BUG, not a FEATURE :-)
Good luck!