https://stackoverflow.com/questions/17783729
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First things first, please be aware that the IE compatibility modes are not really suitable for testing how your site works in other versions of IE. Setting the browser to IE8 mode does not turn it into IE8. There are features that are missing or different, and there are bugs that make it work differently to a real copy of IE8.
The only way to accurately test for compatibility with old IE versions is to actually run your site in real copies of those old IE versions. I would suggest going to modern.ie, which is Microsoft's site for browser testing. You can download free VMs to allow you to test your site in all versions of IE. Alternatively, they are offering a free 3 month package to the BrowserStack website, which is a nice little service that allows you to test in various browsers and versions online without having to install anything. Give those services a try rather than relying on compatibility mode to work for you.
It's also worth saying that the next IE version (IE11, due out in a few months) won't actually allow you to switch to compatibility mode so easily, for exactly the reasons described above; compat mode will be limited only to sites that explicitly declare themselves as requiring it in the headers. That will make it much harder to use compat mode in the way you're doing now.
Having said that, the compat mode does give a basic level of backward compatibility, and your question is about what those menu options actually mean, so let me explain:
Browser Mode: This determines how the browser identifies itself in the User Agent string. (This isn't usually relevant because it doesn't actually affect how the browser works, but occasionally a poorly-written site will check the UA string an change the site according to what it sees). In the screenshot, you've got it set to IE8, so the server might think that you're using IE8, even though you're actually using IE10.Document Mode: This determines the browser's rendering mode. Basically, selecting anything other than the top "Standards" option here will switch off various modern browser features in an attempt to make the browser more backward-compatible with the browser version you select. As I said above, this isn't really much use for accurate testing, but some sites that were written for older versions and don't work with new versions may find it easier to set this mode than to fix their bugs (this applies especially to company internal sites where it's more important to keep it working than keep it up-to-date).
Hope that helps answer the question.
