Using a 'value' for a select edittype in IE 8 causes a problem in the 'editRow' code because the 'setAttributes' function (called from line: 5075) will overwrite the newly created select element 'value' property.
This bug and the line-numbers apply to the jquery.jqGrid.src.js file version 4.0 downloaded today.
So on IE 8, what you will see is that when you call 'editRow' to put the row into edit mode, any select cell will not be initialized with the correct option selected. The select control is in a state with no selections.
One workaround is to use a dataUrl to populate the select data instead.
I have put a quick patch to the setAttributes function by modifying one line 5029 which will ignore 'value' attributes:
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