Compatibility mode isn't what he's talking about. In the developer tools, there's also "browser mode", which allows you to select a different user agent, and "document mode", which allows you to select a rendering engine from IE7 onwards.

I know about them. They aren't actually the browsers in question, though. It's IE9/10 engine with some stuff disabled.

This. We had a client complain that their password failed validation using IE7. Even simple passwords that should pass failed.

Turned out to be an IE7 specific regex bug (a look ahead bug), that we couldn't replicate using IE8 and IE9 set to IE7 compat mode.

Tracked down a copy of XP with IE7 and replicated the bug. Which led me to Google regex bugs related to IE7 and managed to track down the exact issue.

the sad truth is; anything below ie7 should be dropped. Unless you are developing for a corporation that won't move away from ie6 and then you should only test on ie6.

The truth is anything below IE8 should be dropped. IE8's great... it has developer tools, JSON and localStorage, etc. IE7 and below have none of that.

Realistically it should be below ie8. IE7 is old and should be dropped.