I recently came across an IE7 only bug that I thought I\'d share so when I come to this site 6 months from now to figure out the same thing, I\'ll have it on hand.
The easiest fix would be to add position: relative; to the outer div. This will make IE7 work as intended.
position: relative;
(See: http://rowanw.com/bugs/overflow_relative.htm).
EDIT: Cache version of the broken link on waybackmachine.org