two things i see:
1) Your link to the menu-ie.css file is not correct:
<!--[if lte IE 7]>
<style type="text/css" media="all">
@import url("../CSSMenuWriter/cssmw/menu_ie.css");
</style>
<![endif]-->
shouuld be:
<!--[if lte IE 7]>
<style type="text/css" media="all">
@import url("CSSMenuWriter/cssmw/menu_ie.css");
</style>
<![endif]-->
in the menu_ie.css, you have not specified a width for the level 1 items, IE will not work correctly if a width is not specified.