This is a consequence of using a Template Monster template. They have replaced the
<h3 id="categoriesHeading" class=".leftBoxContainer">Categories
element with this set of nested divs:
HTML Code:
<div class="dt TTX_IN1">
<div class="dt TTX_IN2">
<div class="dt TTX_IN3">
<div class="dt TTX_IN4">
<div class="dt TTX_IN5">
<div class="dr">
<div class="dc TTX_IN6">
<div class="tt_txt">
Categories
which, when you look at their styling, are precisely a set of nested tables. Apparently they followed the "use divs with CSS instead of tables" recommendation literally, without the slightest understanding of what that really meant. This, of course, allows all kinds of weird behavior to crop up...
I could accept up to three wrapper divs inside the h3 if the design required four rounded corners for the heading, with automatic adjustment for both height and width, and support for old browsers and IE; but this is ridiculous (and standard for TM).
Also, the headings and their contents are not actually associated with each other, just separate elements following each other in the sidebar.
The best way to fix it (without scrapping the TM template entirely) would be to get rid of the TM sidebox files and style the stock Zen Cart sideboxes to look like the template. You might want to use Categories Dressing to get the categories sidebox to have the same list styling.