IE7/8 does not support either Canvas or SVG.
It does however support VML, which is a vector language similar to SVG, and there are a number of javascript-based hacks for IE that use its VML functionality to emulate both Canvas and SVG in this older browser.
The most well known IE-Canvas hack is this one: http://code.google.com/p/explorercanvas/
I haven't spent much time with it myself, so I can't vouch for whether it can do specific functionality such as the toDataURL()
method you're asking about, but if you can't do it with this, then it's unlikely to be possible at all.
I mentioned that there are similar tools for VML->SVG as well. If that's of interest to you, then you might want to look into this one: http://code.google.com/p/svg2vml/
Bear in mind that no matter how clever these hacks are, there is always a fundamental issue of performance. IE7/8's javascript interpreter is very slow by modern standards, and these are javascript-based tools trying to shoehorn very modern functionality into this old browser. They may well work, but don't try to do anything too clever with your canvas or SVG, or you'll kill the browser.
Finally, since you mentioned that you're using all this to draw graphs, I will point out the graphing module of the Raphael library. Raphael is a library which draws SVG graphics on all browsers (falling back to VML for IE). The graphing module provides all the usual graph types, wrapped in an extremely easy-to-use javascript API. And it is fully cross-browser compatible -- it works on all desktop browsers out of the box from the latest Chrome and Firefox all the way back to IE6. If you're struggling with cross-browser compatibility with the tools you're using now, you may want to switch to this library.
Hope that helps.