There are 4 ways (that I know of) to set the options... (hopefully one of them works for you (let us know which))

//option 1
var newOpt = document.createElement('option');
newOpt.innerText = 'Hello';
mySelectObject.appendChild(newOpt);

//option 2
mySelectObject.innerHTML = '<option>Hello</option>';
//KNOWN TO FAIL IN IE6,7,8 (see url below)

//option 3
mySelectObject.outerHTML = '<select><option>Hello</option></select>'; //IE Only

//option 4
var newOpt = new Option('Hello','Hello');
mySelectObject.options[index] = newOpt;

IE bug with setting the .innerHTML

From steven harman's blog:

function AddSelectOption(selectObj, text, value, isSelected) 
{
    if (selectObj != null && selectObj.options != null)
    {
        selectObj.options[selectObj.options.length] = 
            new Option(text, value, false, isSelected);
    }
}

So your code would become;

function insertBarcodes()
{
    val = document.form1.barcode.value ;
    AddSelectOption( document.form1.blist, val, val, false );
}

The site states that the author ran into the exact issue you mentioned. The author admits that he doesn't know WHY a four-parameter Option object works, only that it does.