I have uploaded a new copy of the skin to the i7MEDIA website. You can download it here: http://i7media.net/i7MEDIA-2HorizontalMenus.zip.
If you have modifed your skin at all you will want to make note of those changes before uploading the new files. All you should really need are the translucent*.png files.
The problem is with IE's display of 1x1 PNG images with different levels of opacity. The issue is intermittent which made me think I had a problem on my computer because every time I tested it on another computer (Vista; IE7 or IE8) it displayed fine. I then viewed a website with the skin on a computer with a fresh install of Vista/IE and it was there. This drove me nuts for a long time as I kept looking for some sort of IE hack to make the silly PNG work correctly. In a last ditch effort, I made the size of the PNG 10x10 (just because, no reason behind the size) and IT WORKED. So, long story short, the PNG must be larger than 1x1 for IE to repeat it properly. The PNGs in the updated skin package are 2x1 and all seems to be fine.
Let me know if this solves the problem for you.