Hi Bryan,
as usual I missed the key part of your report;
>> As usual, this only happens on IE8. All other browsers work fine.
I've been testing on FF and IE7 - so that's why I got lost.
I can duplicate the effect here, but there's no real simple solution. You can "prime" the text box with something (it only happens when the box is empty).
On the up side, it appears that the problem is gone in NetTalk 5. So I can only surmise it has to do with the way the async reply is handled by the js framework.
Cheers
Bruce