I'm a lazy and disorganized person. The code provided in the previous post didn't mention the fact that the XHTML structure was altered by jQuery this way:
<ul id="navigation"> <li><a href="#"><span>Link</span></a></li> <!--more links--> </ul>
So IE7 fails to correctly apply styles because of the presence of an extra element added by JavaScript (a span element). To avoid this problem, you have to specify your styles directly on the innermost element.