The height of the title/banner is the problem with your menu alignement. If you sort that, then the menu will line up correctly.
Remember that your menu is positioned using dhtml and css. It's not inside the table cell. It's ontop of the table. If the table cell containing your logo.gif comes out the wrong size, then it shifts everything down but the menu stays in the same position as it was.
Inside the td that shows the logo.gif, you have <h2> tags that contain your menu script. But the menu, as I said above isnt' inside that location. It's just the code that's there, then menu is effectivly on a different layer of the page. So the <h2> tags are the content of the header. You set the td hight to 38px, however, the height of the td should be the hight of it's content - which is the <h2> tags. So if you remove the <h2> tags then the table cell will set it's hight more correctly.
If I was doing it, I wouldn't put the logo.gif as the background. I'd have that image in the forground of your table cell in normal <img> tags. That way the image will set the hight of the table cell without having to explicitly size the td tag.
As for the menu code. The script does not have to be located physically in the code where it is intened to apear. The script can be put anywhere in your html (usually in the head section). The apparent display location of the menu is set from within the site it's self.
The menu script is not without it's problem. It's clearly quite an old script as it uses <font> tags which have now be depracated. Probably a good idea to get a different menu script.
I notice quite a high amount of scripts on the site. You should remember that many people turn javascript off for security reasons. You should check that your site is still usable when used with javascript turned off. It may be that you have to have a secondary - non fancy - navigation system elsewhere on the site. The scolling images would probably be better done using flash.
.style12 {font-size: 9px; }
<span class="style12">This site is best viewed at <span class="style8">1024 x 768 </span> resolution</span>
That section is best viewed with a microscopt. 10px is about the minimum readable.
Oh and remember to always use http://validator.w3.org