In order for list-style-image to work it has to be list-item display, display:inline; won't show it. You could place it as a background iamge though.
IE6/7 automatically make floated items block level though, so use a bg image instead.
Also, .subnav li targets <li> that has a PARENT class of "subnav"
li.subnav targets a <li> that has a class "subnav"
Post your HTML and we can ge this sorted-sounds ike your just targeting the wrong elements.
Paul beat me to it