Just Updating this threat as i still have found no solution....
I've never used Spry, so take this with a huge grain of salt.. looking at your html, I am kinda wondering how come the 2nd level of the nested list items making up your submenu items arent assigned a different css style - and therefore is your css file setup to handle this change in orientation properly..
You got a class=MenuBarSubItem" on your Championship History, but theres nothing in your html (other than the nested ul within #Menubar1) to indicate that Heavyweight, Cruiserweight, etc. are 2nd Level MenuItems which should be using a different css style.. therefore it would be up to your CSS to handle this change in how these 2nd level sub menu items gets displayed.. looks like this isn't happening for MSIE, as MSIE keeps floating your 2nd level/submenu items horizontally instead of stringing them up vertically.. You may be missing a style rule in your css, but how come FF gets it right?
If I were to recreate this menu myself, I would assign a new css class to make sure my submenu items dont end up floated next to each other.. But then again, i have no clue about Spry, so I might just be rambling nonsense here...
I even created a test site, entered a spry menu with drop down and it appeared fine when viewed in IE browser.
This is leading me to think it's something outwith my spry that is causing this.