That's the problem that it looks ok in a program but doesn't look the same way in a browser.

Worked that out, here's the fixed code;

Code:
<head>
<meta http-equiv="Content-Type" content="text/html; charset=windows-1255" />
<title>Untitled Document</title>
<style type="text/css">

#menu ul {
list-style-type: none;
padding: 0;
margin: 0;
}

#menu ul li {
display: block;
padding: 10px 0 15px 0;
float: right;
}

#menu ul li a {
text-decoration: none;
color: #8C8F7D;
background: #E9EED0;
padding: 3px 20px 15px 20px;
font-weight: bold;
margin-right: 1px;
font-size: 1.1em;
height: 25px
}

#menu ul li a:hover {
background: #DDE6AB;
    color: #2C2E22;
    
}

</style>
</head>

<body>

<div id="upper_nav">
<div id="menu">
<ul>
<li><a href="#">first</a></li>
<li><a href="#">second</a></li>
<li><a href="#">third</a></li>
<li><a href="#">fourth</a></li>
</ul>
</div>
</div>
</body>
</html>