I should mention that the absolute positioning of my nav bar is keeping it to the left and hence the gap at the right. I am not sure how you could reverse this without distorting the output altogether.
Are you sure it’s just IE with that problem? It look like you’re trying to cover up the gap at the end by adding padding to the last-child list item. So if that’s what you’re trying to do, it wasn’t working in my FireFox 8 either because you weren’t giving enough padding: http://jsfiddle.net/7rSMc/3/