I've struggled with IE layout problems myself, and frequently hacks will need to be applied ;)
I looked at your stylesheet - http://www.tropicanabikinis.com.au/i.../css/style.css
Seems like you should try to play around with this section:
Code:
.block_c3
{
width: auto;
background-color: transparent;
background-image: url(../images/block_back1.gif);
background-repeat: repeat-x;
background-attachment: scroll;
background-x-position: center;
background-y-position: bottom;
}
And give it a fixed height in pixels. The grey line comes from "block_back1.gif", and is applied to the bottom of the section as a background image - if it appears in the wrong position, then perhaps IE does not interpret the section's height correctly.
So try adding something like:
(my guess only - your mileage may vary).. of course I'm assuming that all your thumbnail images have the same height, otherwise this wouldn't line up.
If this does not work then I would try a few other things (like changing the height of the transparent "spacer.gif" image to the left of the text to be the total height of the cell, thus forcing IE to have a fixed cell height).
Good luck