Javascript for..in looping over arguments ie.for( arg in arguments) does not work in IE8 but it works in Chrome 8

First of all, while the arguments object available within a function is not an array, it is "array-like" enough such that an incremental for loop (for (var i = 0, len = arguments.length; i < len; i++) { ... }) is preferable - not only because it runs faster, but also because it avoids other pitfalls - one of which is exactly what you're falling into.

To actually answer the question of why the second loop doesn't work, it's important to realize just what for ... in loop does: it iterates through all enumerable properties found in an object. Now, I've bolded 2 words in that statement, because I used these two words purposefully to indicate a couple of nuances that, while they may seem subtle, can drastically affect the behavior of your code if you don't realize what's going on.

First let's focus on all - by which I mean to say, not just properties of the object itself, but also potentially properties said object has inherited from its prototype, or its prototype's prototype, or so on. For this reason, it is very often recommended that you "guard" any for ... in loop by immediately additionally qualifying it with the condition if (obj.hasOwnProperty(p)) (assuming your loop were written for (var p in obj)).

But that's not what you're running into here. For that, let's focus on that second word, enumerable. All properties of objects in JavaScript are either enumerable or non-enumerable, which pretty much directly relates to whether the property shows up in a for ... in loop or not. In browsers such as Firefox and IE, as it turns out, the arguments object's numeric properties are not enumerable (nor is its length as it were), which is precisely why you're not iterating through anything!

But really, in the end, for iterating through anything that is an Array or array-like, you are better off using an incremental loop (as M. Kolodny also stated), and avoiding these shenanigans altogether (not to mention potential cross-browser inconsistencies - I seem to be noticing that in Chrome 10, the numeric properties of arguments objects are enumerable!)

Try using this as a format function:

String.prototype.format = function() {
    var me = this;
    for (var i = 0; i < arguments.length; i++)
        me = me.replace(new RegExp('\\{' + i + '\\}', 'g'), arguments[i]);
    return me;
}

Now this should work:

alert('The {0} is dead. Don\'t code {0}. Code {1} that is open source!'.format('ASP', 'PHP'))

DEMO

Tested and working in IE