As Pascal discovered the hard way, Internet Explorer always stacks something like a SELECT drop-down list on top of a normal HTML element, regardless of what z-index you use for each of them.
That is because SELECT (and a handful of other elements) are windowed controls_, and, basically, all windowed controls will always paint themselves on top of a windowless control. Even the highest windowless element is always going to be under the lowest windowed control.
_
So why with Netscape and IE for Macintosh, I don't have the problem ?
I think the issue is is really in the implementation. IE uses a OS-level controls to handle the rendering. I am pretty sure Netscape doesn't use native controls in any case, and I assume the issue isn't present on IE on Macs because the OS rendering is different.
I'm not terribly familiar with the intimate details here, but I'm sure someone else here might be able to shed more light on it and why it works that way. I think it has something to do with having a CWindow handle....
Some links on popups:
I can't find anything using an IFRAME, but it's just a matter of replacing your DIV with an IFRAME and using the IFRAME's document body.
I'll see if I can dig anything else up.