I have been using the following solution (with no positioning and no line height) since over a year, it works with IE 7 and 8 as well.
<style>
.outer {
font-size: 0;
width: 400px;
height: 400px;
background: orange;
text-align: center;
display: inline-block;
}
.outer .emptyDiv {
height: 100%;
background: orange;
visibility: collapse;
}
.outer .inner {
padding: 10px;
background: red;
font: bold 12px Arial;
}
.verticalCenter {
display: inline-block;
*display: inline;
zoom: 1;
vertical-align: middle;
}
</style>
<div class="outer">
<div class="emptyDiv verticalCenter"></div>
<div class="inner verticalCenter">
<p>Line 1</p>
<p>Line 2</p>
</div>
</div>