Wow - That took some finding - I must be losing my touch 
IE is loosing the height of the nested ul and is reapplying the top and bottom padding each time which is causing the movement of the element belows. If you take out the padding from the list elements the menu becomes stable but obviously tou want the padding in there.
However the usual fix seems to work so add this code to the end of your stylesheet and it should cure the problem.
Code:
/* commented backslash mac hiding hack \*/
.lhconttableover LI,.lhcont LI {height:1%;}
/* end hack */
Copy all that code exactly and don't leave the asterisks out.
Paul
BTW your list is incorrectly constructed: Sublists should be like this:
<ul>
<li>
<ul>
<li></li>
</ul>
</li>
</ul>
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