Why are you floating the anchors (
)? Anchors are inline elements, you don't need to float them. That's why your #navigation element is giving the illusion that the background isn't showing. It's actually the fact that the height is zero. That's because the container (in this case, #navigation) doesn't acknowledge it's floating content, and appears empty. Try this:
background:#fff url(../images/navbg.jpg) repeat-x;
Can't test it because you have no link to test on, but this is a common problem people have, and this usually fixes it.