Microsoft confirmed that the vulnerability exists in the official release, said Terri Forslof, a researcher at TippingPoint, which sponsored the Pwn2Own contest that challenged competitors to find bugs in either web browsers or mobile devices.
No details of the IE8 exploit -- discovered last week by the hacker "Nils" -- are available, but it could represent a major problem, Forslof said.
"This is a single-click-and-you're-owned exploit," she told SCMagazineUS.com. "You click a link in an email or simply browse to a website, and your machine is compromised. This meets Microsoft's ‘critical' bar [in its vulnerabilities and rating system]."
The exploit was demonstrated the day before the final version of IE8 was released.
"Once the browser was compromised, we handed over the exploit to Microsoft immediately, on site," Forslof said. "They went back and reproduced it and called to verify that the vulnerability was present. We retested again on the released version of IE8 that went live on the following morning and verified that the vulnerability was in it as well."
The exploit apparently defies Microsoft's DEP (Data Execution Prevention) and ASLR (Address Space Layout Randomisation) technologies -- two features added to IE8 to prevent memory corruption vulnerabilities.
For its part, Microsoft said in a blog post: "The final release of Internet Explorer 8 on Windows Vista blocks the .NET DEP+ASLR bypass mechanism from malicious websites on the internet. But this post may have been more specifically referring to different bypass mechanisms that were demonstrated by a pair of researchers at last year's Black Hat conference in Las Vegas.
In addition, the Microsoft post only mentions Vista. The CanSecWest exploit was demonstrated using a beta version of Windows 7, which may call the issue into question.