I just found IE Collection, a multiple standalone IE installer (IE 1.5 through 8.0!) and it has been a great help for finding little rendering issues in my CSS. My concern is that our MCSE/IT guy says that it is a violation of Microsoft's redistribution rules. Am I breaking the rules by using it? Do others use IE Collection or other standalone installers or just stick with Microsoft's prescribed VirtualPC images method for testing?
I use that as well and frankly the way I found it was because a Microsoft employee had posted the link on his blog. I'm not saying that necessarily means it is ok but it sure seems like something you'd be fine with.
I make virtualbox images for testing (SP1/2/3 with IE6/7/8 in both 32 and 64-bit). If your MCSE/IT guy says that it's not legit, it probably isn't.
As far as I know it is not a violation, especially if you are using it for what I assume to be testing, especially if you have an MSDN license.
It does get into some gray area, and it might be a good practice to just use a virtual box to be safe, but I doubt that MS would seek licensing problems with a free application used for development purposes.
I can't comment on the licensing concern (or the political pain you might experience by questioning Mr. IT), but consider Microsoft's Internet Explorer Application Compatibility VPC Image as a possible solution for your testing needs.
If you aren't redistributing it, it's not a violation. You can install as many IE's as you want on your PC, and in fact, Microsoft supported this with IE6/IE7 for quite some time (unofficially).
What you will not get is support from Microsoft for this sort of configuration. Other than that, as long as you are using IE they don't care. They don't make any money off of it.
A pretty simple way to keep yourself in the clear with this sort of thing is to simply ask "Am I directly or indirectly taking money from them?" If the answer is "No." (and it sounds like it is) you really don't have much to worry about. Ultimately all they are trying to do is protect their assets.
There is nowhere in the license that says you can't install multiple versions of IE at the same time. The problem however lies in redistributing them for a profit, and since you aren't redistributing or making a profit with them, but rather using them for personal use, I can't see any reason why there would be a problem with this.
If the distribution that you are using is bundling Active-X components instead of the entire browser, then this is most definitely in the clear; the Active-X components for IE have had a license just for this sort of thing for years and has been specifically bundled with Visual Studio and other IDE's for a use such as this.
Legally, this is a licensing violation, although I seriously doubt you're going to get a hard time from anyone about it.
The real problem is that there's no way to guarantee that those bits are not infected with malware, and more importantly, side-by-side is not supported, does not work reliably, and does not match the standalone behavior. There are many crashes and quirks that only work in hacked side-by-side configurations.