Thanks for your help! That fixed the main side navigation perfectly! I must have somehow put "display: inline" there during my attempts to troubleshoot the problems in IE. The addition of the "li" width is definitely what did it.
Unfortunately I’m still having an issue in IE7 with the second level of the navigation "ul#inner" being too far away from the main side navigation. I thought it was the double margin bug so I switched the margin to padding and it seemed to give the same effect. Do you have any suggestions for this?
Again, thank you for taking the time to provide me with assistance!