IE 7 problem

Normally in a case like this I would suggest using a reset since browser defaults are what's causing this.
Another suggestion might be to absolutely position an element that is so critical to be in the right place, though I usually avoid ap until it's absolutely necessary.

Putting a background color on #left_content shows the difference between different browsers.
Like this -

#left_content {
	width:800px;
	float:left;
background: #00f;
}

Specifying the margin on the p in #menu will even that out. IE7 has a different default here than other browsers.
Try 16px or so... like this -

#menu p {margin: 16px 0;}

thanks, that did it!