Doing it with style
I have been meaning to fix this bug for a long time but after receiving an email asking if I had an answer to this, I revisited it and have come up with an easy working solution.
If you are using IE6 then the first menu above will show the problem. When a select box is beneath a drop down list it always appears on top of the dropdown menu. This is due to a bug in IE6 (and IE5.x). However by using an iframe shim between the select box and the dropdown list it is possible to get the drop down list to cover the select box.
All that is needed is to add a basic iframe before the dropdown ul and style it with a size that covers the select box, this iframe is only seen by IE5.x and IE6. Simple.
Tested in IE6, IE7, Firefox, Opera and Safari (PC)
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