try this instead, the problem is the because of the <form> tag. if you wrap it in a table it lays out better
Code:
{* $Id: news.tpl,v 1.14 2003/08/13 06:49:07 svowl Exp $ *}
{capture name=menu}
<FONT class=VertMenuItems>
<span style="font-size: 9px">
{include file="today_news.tpl"}
</span>
<FONT class=TheNews>{$lng.txt_subscribe_monthly}</FONT>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
<tr><form action="{$xcart_web_dir}/mail/subscribe.php" method=get name=subscribeform>
<td>
<input type="text" name="email" size=27>
{include file="buttons/subscribe_menu.tpl"}
<input name=redirect type=hidden value="{$redirect}">
</td></form>
</tr>
</table>
</FONT>
{/capture}
{ include file="newsletter_menu.tpl" menu_title=$lng.lbl_news menu_content=$smarty.capture.menu }