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What you need to do depends on what you are planning to achieve on the page. The smallest change would be to reverse the nesting:
<div><a href="#"></a></div>
If you are trying to get hover behavior on an entire div, IE doesn't do that, although there are some workarounds. Some time researching the CSS Forum can turn up solutions for some cases, for example.
Can hover make other elements visible? [webmasterworld.com]