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In IE7 you'd just have a box without the triangle, no? Isn't that graceful degradation?

Nope, you don't have a box at all (at least on this webpage). Nor the left-side box.

It looks awful on IE7 actually, the footer also degrades un-gracefully.

I wrote this a while ago, using some actual HTML elements—to get it to work super cross-browser: http://mrcoles.com/blog/callout-box-css-border-triangles-cro...

IE8 as well.