IE 7 bug: nested list (abs. positioned) is overrun by preceding link's background colour

This example illustrates the bug. Hover the mouse over "Home products" and you will see that none of the subitems are rendered. The following code triggeres the bug (bugged is the class applied to main UL element):

.bugged li:hover a {
	color: #000;
	background-color: #ff4500;
}

This one ilustrates alternate styling that avoids the bug and the items are rendered. The following code is used and is bug-free (works is the class applied to main UL element):

.works li:hover {
	background-color: #ff4500;
}
.works li:hover a {
	color: #000;
}