Alan Gresley wrote:

> I don't know why it happens but floating the list fixes the bug in IE7 
> and doesn't seem to effect other browsers.
>
>
>
> .menu ul, .menu li {
>   list-style:none;margin: 0;padding: 0;
>   float:left; /* ADD */
> }

Thanks, Alan. I've updated the test page:
http://datagnostics.com/test/transparent.html
to include this new example. It looks as though it's the combination of 
position:absolute with background:transparent that is giving IE7 the 
vapors. Have you (or anyone else) been able to test in IE6? Can you-all 
think of any other tests I could run?

Mary Ellen

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