I am using Visual Web Developer 2008. I am debugging my javascript on localhost by adding a breakpoint / debugger to the js file.It works fine in IE8 before.
This nice debugging feature is broken after I try the developer tools (press F12 in IE8).
Firebug is excellent (+1). However, the debugger in IE8 also works great. I never use the VS debugger. If you're already using IE8 developer tools, just debug there, not VWD.