Menus look good in Firefox with standard Plone style, but in IE there is big gaps between items, and the items don't highlight on mouseover (see image at http://www.greenhithe.org.nz/misc/menus.PNG ). What do I need to change in CSS or JS to make it work?

The last version of qPloneDropDownMenu wasn't tested with IE7 because it had been released before IE7.
In the next version of product this will be tested and fixed.

So for now try to experiment with css by yourself.