There's too many points on which to comment, but FM08 is definitely a more complex game than previous iterations, so more variables can affect performance, and in some cases more seriously than in previous versions of the game.
Team Morale
This seems to have a greater impact in FM08. All teams have dips in form, but the impact in FM08 is more severe. That probably explains your dip at the end of the season. Ensure you keep up morale.
Team Talks
The whole notion of team talks (and pre-match media comments) is more "twitchy" in FM08, with the effect of what you say being more pronounced. There's a thread in the Tactics forum (I think) created by Wolfsong about team talks. It's seriously worth digging it out and applying that. Worked wonders for me.
Tactics
No more super tactics in FM08, but certain things work well. Two tactics I've used with success are xavierm's 4-1-3-2 and Croat's 4-2-3-1. Your mileage may vary.
Set Pieces
Again, this works differently in FM08, so have a read in the Tactics forum about how to set up corners. Since doing that, my team scores more goals from corners, an by some margin!
And Finally...
Isn't it great that you have such a challenge, as the game would become boring and predicatble after a short time.