First off, the links should be in a list. Second, to display correctly, you'll probably want to use display:block on the a:link rather than the <li> (IE issues avoided thus).

I'm not sure why you've got a#home, unless you are trying to apply a hover state to a <div> or something, in which case you are going about it wrong, plus IE doesn't support pseudo :hover. But since I don't think this is the case I'll shut up.