It's definitely good to see that the responses are quite similar to what I would suggest. Graduating from 8th grade is definitely something to celebrate, but more along the lines of a special birthday. Save the big party for high school or even college graduation (you'll have plenty of things to spend money on during freshman year - like the yearbook and class ring!)
On graduation night we just had grandma and the godparents (those were all who were able to attend the weeknight "ceremony" anyway) over for cake and coffee.
Then about a month later when the weather was better had a backyard bbq with family and friends. It was nice to be able to have everyone outside playing baggo, horseshoes, volleyball, swim, etc. It was more of an open house and people could come whenever they were able during the day and some stayed later for a fire. You could even allow his friends to spend the night.
As it is a rite of passage some of the gifts were more of an independent flair...things they'll need in high school. We gave our daughter a letterman's jacket. One suggestion if you go that route, though is to find out how they earn their script and letters through the schools sports, band, and/or academic departements. I think some parents purchased the script (which can cost $20 or more) from the local store when they can earn them by participating in the above activiities (thus saving the $$ since you spend money participating anyway).
Good luck and congratulations!