What happened to bitcoins 'mined' on the 0.8 chain in the meantime? Did people lose their currency?
But what happens to the mining reward, I don't know. Anyone?
A mining reward is actually just a special transaction that the miner includes in blocks they find that let them pay themselves out of thin air.
So, the mining reward transactions on the 0.8 branch only exist on that branch, since the 0.7 chain had its own reward transactions made out to its own miners. When the network reached consensus on the 0.7 branch, money that miners on 0.8 thought they earned just disappeared (other clients stopped acknowledging their reward bitcoins).
Some pool operators lost out too, since they paid people who found blocks on the 0.8 branch.
If pools paid miners using bitcoins from their own mined blocks, this problem would go away-- that's not a bad idea!
edit: I asked -- some pool operators apparently already do this. The ones that lost out are the ones that don't.