Nope, the DTD doesn't seem to be the culprit here. Even with a valid doctype, the menu is still positioning incorrectly for me. Nothing short of replacing the HTML for your main menu items entirely seems to fix the problem, so the best I can say right now is the the problem has to do with something within the HTML of your main menu:
Code:
<tr>
<td><img border="0" src="images/log2.gif" width="8" height="8" alt=""></td>
<td width="771" bgcolor="#94ACA7"><div id="bluemenu" class="bluetabs">
<a onMouseOver="changeImages('img1', 'img1on')" onMouseOut="changeImages('img1', 'img1off')" href="competition.html"><img name="img1" border="0" src="images/competition.jpg" align="left" width="131" height="30" alt="Enter Competition"></a>
<a onMouseOver="changeImages('img2', 'img2on')" onMouseOut="changeImages('img2', 'img2off')" href="about.html"><img name="img2" border="0" src="images/about.jpg" align="left" width="93" height="30" alt="About Us"></a>
<a onMouseOver="changeImages('img3', 'img3on')" onMouseOut="changeImages('img3', 'img3off')" href="chalet2.html" rel="dropmenu2_b"><img name="img3" border="0" src="images/chalet.jpg" align="left" width="80" height="30" alt="The Chalet"></a>
<a onMouseOver="changeImages('img4', 'img4on')" onMouseOut="changeImages('img4', 'img4off')" href="testimonial.html"><img name="img4" border="0" src="images/testimonials.jpg" align="left" width="100" height="30" alt="Visitor Testimonials"></a>
<a onMouseOver="changeImages('img5', 'img5on')" onMouseOut="changeImages('img5', 'img5off')" href="press.html"><img name="img5" border="0" src="images/press.jpg" align="left" width="112" height="30" alt="Press Release"></a>
<a onMouseOver="changeImages('img6', 'img6on')" onMouseOut="changeImages('img6', 'img6off')" href="contact.html"><img name="img6" border="0" src="images/contact.jpg" align="left" width="77" height="30" alt="Contact Us"></a>
<a onMouseOver="changeImages('img7', 'img7on')" onMouseOut="changeImages('img7', 'img7off')" href="terms.html"><img name="img7" border="0" src="images/rules.jpg" align="left" width="59" height="30" alt="Terms and Conditions"></a>
<a onMouseOver="changeImages('img8', 'img8on')" onMouseOut="changeImages('img8', 'img8off')" href="questions.html"><img name="img8" border="0" src="images/faq.jpg" align="left" width="52" height="30" alt="Frequently Asked Questions"></a>
<a onMouseOver="changeImages('img9', 'img9on')" onMouseOut="changeImages('img9', 'img9off')" href="http://www.winacabin.co.uk"><img name="img9" border="0" src="images/home.jpg" align="left" width="65" height="30" alt="Home"></a>
</div>
</td>
</tr>
Not sure how married you are to the menu's HTML above, but ideally, you should switch to a list based menu similar in structure to one of the five shown on the DD demo page.
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