How to fix the IE9/WordPress Twenty Ten Header Image Display Problem?

It is a bug. See WordPress Trac Ticket#14883. If you change

#branding img {display:block;} to display:inline; it fixes the image being shifted right but does not fix the white space between the border.

Update:

The ticket still has not been accepted as a bug but a patch has been submitted.

Update

The patch has been accepted and the IE9 Header image display problem will be fixed in the next release.