Thanks for your input guys.
I have found the source of the problem, nothing to do with the literal tags (although I have now put them in

)
In rectangle_top.tpl i have the call to the js and the start of a table -
<table border="0" cellpadding="0" cellspacing="0" width="{$width|default:"100%"}" height="100%">
<tr>
<td valign="top"><div style="position: absolute;" id="div_null"></div>
If I remove the above code, the menu works in IE. At first I thought it was the div id call, but even if I just remove the <div></div> I still get that js error, if I remove the start os this table, row and cell, the error disappears!
Now b4 I get too elated, can anyone tell me what this id=div_null does?
Thanks