Hi,
You've made that a bit awkward haven't you 
You should put the label and the input in the same list item and then you can clear each row to keep things nice in ie.
e.g.
Code:
<div id="contact-form">
<div style="margin:30px 0 10px 0;width: 260px; padding: 0; float: left">We aim to get back to you within the next 24 hours.</div>
<form action="" method="post">
<ul>
<li class="li-height">
<label>Your name: *</label>
<input type="text" name="name" class="rounded" value=""/>
</li>
<li class="li-height">
<label>Phone: </label>
<input type="text" name="phone" class="rounded" value=""/>
</li>
<li class="li-height">
<label>Email: *</label>
<input type="text" name="email" class="rounded" value=""/>
<li class="li-height">
<label>Enquiry: *</label>
<textarea id="body" name="enquiry" cols="10" rows="10" class="textbox" ></textarea>
</li>
<li class="li-height">
<input type="submit" name="contactus" id="contactus" class="submit" value=""/>
</li>
</ul>
</form>
</div>
You should also associate the labels with the input id for good accessibility e.g. <label for="contactus">label</label>
Code:
/******************************************** CONTACT ********************************************/
#contact-form {
width:445px;
overflow: hidden;
margin:0;
}
#contact-form form {
margin:0
}
#contact-form ul {
list-style:none outside none;
margin:0 180px 0 0px;
padding:0;
clear:both;
}
#contact-form li {
padding:0;
width:100%;
position:relative;
left:-5px;
}
.li-height {
margin:0 0 10px;
clear:both;
overflow:hidden;
}
#contact-form li label {
float:left;
width:85px;
text-align:right;
padding:0 5px 0 0;
margin:0;
clear:both;
}
.rounded {
background:url("http://www.flawless-wheels.co.uk/flawless/view/images/text-box.jpg") no-repeat scroll left top transparent;
border:0 none;
color:#333;
font-size:13px;
height:24px;
line-height:27px;
margin:0;
padding:0 3px;
width:165px;
}
.submit {
background:url("http://www.flawless-wheels.co.uk/flawless/view/images/submit.png") repeat scroll 0 0 transparent;
border:0 none;
cursor:pointer;
height:17px;
width:92px;
margin:20px 0 0 150px;
}
.textbox {
background:url("http://www.flawless-wheels.co.uk/flawless/view/images/textbox.jpg") no-repeat scroll 0 0 #E1E1E1;
border:1px solid #BEBEBE;
height:60px;
width:170px;
margin:0;
overflow:auto;
}
/******************************************** FOOTER ********************************************/
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