I can see what you mean in IE 7. I'm just guessing here, but it seems that it is only the description area on top of the pictures below the drop down menu that are obscuring the menu list, and not the pictures themself?
If so, it may help to re-position those descriptions maybe to the bottom part of the pictures.
Start with fixing all of your CSS errors. Copy and paste the CSS here. You will see that at the bottom of the page a valid form of your code is spit out. You have 30 HTML errors too, but none of them are affecting the page.
In IE6 something is overextending the li and/or the a - causing the ddcontainer to go down into your images. I think it may be from a lot of your comments not being ended in your CSS.
Since the boxes over the images are positioned relatively and the ddcontainer is positioned absolutely, they are both removed from the normal flow of the page, and will be listed from the bottom up in the order they are written. Putting your navigation after the images/boxes in your HTML is a possible fix. However, it will require reposition the navigation back to it's original place.
Or as Kraai said, you could simply move the boxes elsewhere. Regardless, there would still be an inconsistant "height" issue.