tedster - 1:00 am on Oct 9, 2010 (gmt 0)
If the URL in the href attribute begins with a forward slash, then the rest of the URL simply follows on after the domain root. The <base href> is essentially nullified by root relative links and only would kick in with the ../ style of relative linking.
So it sounds to me like the browsers have it right. However, Google may be finding those messed up URLs somewhere else, somewhere that does use the ../ style.