Just realized that I was mistaken about the transparency problem. IE7 was rendering the transparency fine ... but the float was pushing the div with the gradient to the left and showing the color below.
Here's the fix:
Move these lines from #tagline to #logoWrapper:
Code:
background-image: url(../images/header_bg.jpg);
background-repeat: repeat-y;
And then move this line from #logoWrapper to #headerWrapper (you'll need to make a section for it):
Code:
background-color: #485766;
and all will be well.
BrandTim