It has worked well for me so far, for my limited usage, although I'm only using it to test a basic stylesheet for IE7 and lower. I've started using the IE meta tag, but I found that the display can still be altered by setting the version number in the tag. Without the tag, the compatibility button appears in IE8 (except when viewing locally).
There's also an option in IE8 to view websites in IE7 mode, though it's not completely reliable, from what I hear.
<meta http-equiv="X-UA-Compatible" content="IE=7" >