Yeah you have some other positioning problems going on in IE6/7. You have used a lot of relative positioning on that page and it is catching up to you now.
As for the #nav2 a width while get IE7 to drop it down in the right spot. You have a little spacer image that goes to the left of that navbar, it is getting hung up in IE7. Give it a float and clear left then the navbar will float in beside it. Then remove the relative position from the next image and float it also, use a negative top margin instead of positioning on it though.
<img <font color='Blue'>style="float:left;clear:left"</font> src="images/index_05.png" width="30" height="34" alt="" />
<li id="new"><a href="#"></a></li>
<li id="specials"><a href="#"></a></li>
<li id="about"><a href="#"></a></li>
<li id="contact"><a href="#"></a></li>
<img <font color='Blue'>style="float:left;margin-top:-12px;" </font>src="images/index_06.png" width="262" height="34" alt="" />
Now give nav2 a width and relative positioning in order to stack it above the positioned div that follows it.
<font color='Blue'> float:left;
<font color='Blue'> position:relative;
Those are really just some fixes for IE7, I would really try to do away with more of that positioning if I were you.