Hi David, I found that there is CSS in your stylesheet.css file that makes the anchor elements collapse in width rather than expanding to the full width as they should, being display:block. If you delete that file you should see the difference there. My guess is that because you are using absolute positioning on everything, you are triggering IE bugs with contained floats and the like.
Also, and probably equally important, I found that anchors without href attributes, as per your example, render differently compared to those with them. I think you should add them in for sanity's sake. I don't advise adding width 100% to the anchors because then the padding will make them too wide. I hope this gives you some new leads to follow in your debugging. As always, I should mention that the ideal way to create these menus is to start from the demo CSS, which is quite bullet-proof, and test in Firefox and IE at every step of the way as you customise the look to suit your site. That way you know exactly where, when and why the IE bugs crop up.