I have a very strange issue and I have done almost everything to make code simple.
The issue is - I have a horizontal menu and onmouseover of it I am changing its background. It works fine if that page doesnt have any row in the table. But if table has 50 or more rows the menu performance changes drastically in IE7/8 (Haven't checked older versions), it works fit and fine in FF and Chrome (No matter how many rows are there in the table).
I don't know if it will help your particular case, but I recall reading once that it was more efficient to change the class than it was to directly modify the style of an element. So maybe you could try onmousover adding a class (that has style rule defined for background-color: #d0d0d0) and onmouseout removing that class? Just a thought.
Thanks fotiman...You are correct indeed. I also read it somewhere but in my case even thats not helping me. As I said I think its dojo framework creating problem. Either I am not using it properly or it already have problem with the performance.