This was happening in RC2 for me, as well, so I don't think it's an RC3-specific issue. My guess had been that it's either a flaw in CSS rendering of IE, OR the CSS file for the theme was doing something that IE could only understand when it was in the mood.
I can't think of anything that XOOPS would be doing to impact the issue. However, I am digging into CSS to polish my theme... so perhaps something will turn up in the process.
Summary:
-This happens in both IE 5.5 and IE 6
-This happens in the phpkaox theme as well as yours
-This happens in RC2 and RC3
As I dig into CSS, some useful sites I've found are in this thread.
<small>[ Edited by sunsnapper on 2002/6/9 22:03:03 ]</small>