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I've tested this with many browsers on Mac: in every case it works correctly. It also works correctly with Firefox on Windows. Internet Explorer on Windows doesn't recognise the position "fixed", but in this case this isn't so bad. The position attribute is just ignored and IE places the div in the top left-hand corner of the screen, which is where it is positioned it anyway (if you haven't scrolled down the page). This means that when the page is opened in IE, it looks just as it does in the other browsers; it's just that when you scroll down the page, the navigation div disappears upwards like any absolutely positioned element. So the page is perfectly usable in IE, you just don't get the added benefit of the navigation links always staying on-screen.
So now my questions:
I've read that using position:fixed is Not a Good Thing, that I shouldn't do it, etc. etc. In this particular case, what are the possible dangers? Are there browsers that might not display the element at all? Or will any browser that can't understand position:fixed just ignore it and place the element in the top left-hand corner, as does IE for Windows?
Most browsers understand (and implement) fixed positioning properly.
It's just IE/Win that has issues (as always).
But, if you (and your visitors) can live with the difference in rendering between IE/Win and "good" browsers, I don't see a reason for not using fixed positioning as it will work as expected in other browsers.