A series of <a>s (one...nine) with display:block, hasLayout, margin-bottom, hover with background-color change (could be marked up using lists with the same problems, here used just divs for simplicity.)
The hover on <a> number N makes the margin-bottom number N-2 to disappear if present (this is the space between <a>s #N-2 and #N-1), and makes the margin-bottom number N-1 to reappear if not present (this is the space between <a>s #N-1 and #N). This creates a jumping effect when the mouse is moved vertically down and up on the anchors.
The cases after the first do not have the problem (see below). The problema has been fixed in IE7 (but not so other similar problems, see IE7-/Win: disappearing UL bottom margin on hover.)
case 1
case 2
case 3
case 4
case 5