This seems rather odd, because if I for instance only add blocks in the left side.. the it expands all the way to the right... but if I only add blocks to the right side.. it doesn't expand out to the left?!?!

Checkhttp://renegade.insane-asylum.dk/modules/ipboard/ for an example....

Can anyone explain where I correct this?

I had a similar problem once. What I discovered was I needed to add an "if" in my theme for the left blocks otherwise my coding was permanently fixing the left column because in actuality that is what I told it to do.
What I did was add the below just after the <tr> of the the left blocks table:
<!-- Display left blocks start-->
<{if $xoops_showlblock == 1}>
Then closed the "if" just after the:

<!-- End left blocks loop -->
</td>
<{/if}>

In your case I think if you do this it may work for you:

(FROM YOUR THEME)
<tr>
<TD vAlign=top width=100%>
<TABLE cellSpacing=0 cellPadding=0 width=100% border=0>
<TR>
<!-- Display left blocks start-->
<{if $xoops_showlblock == 1}>

<TD valign="top" width="180"><br /><{foreach item=block from=$xoops_lblocks}>
<{include file="378xps/theme_blockleft.html"}>
<{/foreach}>
<!-- End left blocks loop -->
</TD>
<{/if}>

You may have to play around with it a little bit because I couldn't quite figure out all your theme coding.

Quest