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Fotiman - 9:03 pm on Jan 19, 2006 (gmt 0)
As for the fix, adjust the top/left (or whatever you're using to specify the location of the absolutely positioned element) to compensate for the padding of the containing element. For example, if your containing element has a padding of 10px, then adjust the top/left to be -10px. I haven't verified that will work, but I think it should. You may also need to adjust the z-index to make sure your absolutely positioned element is on top.
You could try using a conditional comment to include a stylesheet hack for IE. In other words, define your style as you have (for Firefox, Op, etc.), and then wrap your IE style in conditional comments.