div border moving to top in IE

[malachi.constant]

I have some navigation tabs which aren't displaying correctly in IE.

They are within a div which has border-bottom set, but as you can see
from the following screenshot, they don't display correctly. The bottom
part is how it should display, in firefox.

http://www.geocities.com/lestat1552/scrn.JPG

I think I've isolated the problem to the following:
(the tabs are within outer, which is within another container, dotted
border in the screenshot)

#outer {
display: block;
position: relative;
background:transparent;
padding:0em;

}

It's as if IE isn't picking up the position:relative. When relative is
changed to absolute the strange behaviour is emulated in firefox and
opera.

Any help would be appreciated.