Internet Explore 8 is many times better than the its predecessors in providing better security, performance and browsing experience. The favorites bar of Internet Explorer 8 allows us to keep the frequently accessed links handy.
You can add links to the favorites bar by dragging the icon of the webpage displayed in the address bar or by just clicking the 
Hide Text of Links and Display Icons Only
By default IE displays the icons as well as the title of the links in the Favorites bar and because of this each link occupies lots of space. If you are comfortable of identifying a website link by its icon, you can opt to hide the text and display only icons in the favorites bar as shown in the following picture
To configure IE 8 to display only Icons – Right click on one of the Links and choose the menu option Customize Title Widths -> Icons Only. That’s all.
Note: This option is not available in Internet Explorer 8 Release Candidate version. So if you are still using Internet Explorer 8 RC(especially Windows 7 beta users who has IE 8 RC) you will not find this option.