I have not encountered the problems you are having using "stock" IE7 running on WinXP SP3.
Does your IE7 installation differ from a fresh IE7 installation, as in, do you use any extra add-ons or customized settings?
From troubleshooting this problem, it seems to be caused by the way that your instance of IE7 is rendering the webpage incorrectly. If you can view the page correctly in Firefox, then I am ruling out any other possibilities than IE7 or a conflict betwenn IE7 and some active antivirus/firewall.