go with the margin. Add 1px top padding to the header and reduce its height by the same 1px.
research collapsing margins for the reason why. also, you should validate – you have 4 errors. while anchors are allowed to contain block-level elements in html5, they can’t be children of a ul – only li’s can. Just put the anchor within the li and set to display: block;
@TT_Mark, there is no wrapper, or any floats for that matter (other than the list items in the nav, which are accounted for). What will overflow: hidden do?
Sorry, I meant to the header (he said bubble ‘wrap’ and it’s only Monday ;-) ), and the one with the margin on rather than the padding. It’s basically because it assumes the header does not actually start until the slideshow because there is no content positioned relatively within it. Or something like that
While overflow:hidden works, it’s probably not the best way. You should probably position the slideshow relatively within the header div.