CSS dropdowns with FIELDSET problem in IE

I am working on a website that uses a CSS dropdown menu system.

When the dropdown menu drops down over a page with a form on it that uses the <FIELDSET> tag, the contents of the form shows through the dropdown menu elements in Internet Explorer. Moving the cursor down the menu and over the text in the <LEGEND> tag or over any of the form elements causes the dropdown menus to disappear, rendering them useless. This behavior doesn't manifest itself in Firefox, only IE. A sample of the scenario is:

http://www.brainstormlabserver.com/sample1.gif

If I remove the <FIELDSET> tag, the dropdown menu behaves as it should in IE, but I lose the styling ability I have with the tag. A sample of this behavior is:

http://www.brainstormlabserver.com/sample2.gif

I have searched Google far and wide and have found no mention of this on the web. Can anyone recommend what I need to do to eliminate this behavior, or is this just a quirk in IE that we have to learn to live with?

The actual URL for the site where this is happening is:

http://dev.robbins-free.com/index.php?option=com_cmsrealty&Itemid=212

Any assistance would be appreciated.

#nav {
position: relative;
z-index: 1;
}

[1] IE z-index bug (http://therealcrisp.xs4all.nl/ie7beta/css_zindex.html)

You, my friend, are a genius. Thanks ever so much. I can now expend the 3 hairs I have left in my head on another problem on another day.