<< I was wondering if there's an easier solution that will allow older IE to work with HTML 5 and CSS3? Some magical all-in-one solution? >>
The short answer: no.
Longer answer: what you’re asking, is for a piece of software that was invented before HTML5/CSS3 were fully invented (or stabilized), to be able to work with that modern technology. It’s a bit like trying to get a TV from 2001 to show a recent 3D high-def movie the same way a modern TV does: you can’t make old software function the exact same way as new software.
Sure, you can use tools to improve it a little, but the older versions of IE you go for, the more difficult it will be.
If you really want to serve those who use IE7/IE8, forget about box shadows, rounded corners, and all those things and focues on making the site just work — instead of making it look the same in both old and new browsers. Using HTML5 shiv (to make the browser understand HTML5 tags) should be sufficient, and then users of older browsers will just get a less spectacular looking website. So what, they won’t stop visiting your site just because it doesn’t have fancy effects really.
The reason why Windows XP can’t run any versions of IE after 8 has something to do with the hardware accelleration technology I believe. The 2011 codebase of IE9 is just too modern for the 11-year old operating system. And let’s be honest…if someone is using an OS that’s 11 years old, they don’t really deserve to get the exact same browsing experience than those who do upgrade their software to be a little more up to date, right? :)
If you want a modern website to work properly, get a modern browser. And if you want a modern browser, get a modern OS.