Title is called Squish the Internet Explorer Z-Index Bug and written by Brenelz Web Solutions.
I had jquery dropdown menu from www.kriesi.at and jquery.innerfade.js on a home page. The dropdown menu goes behind the slideshow in IE 6/7.
I have forgotten about it and here comes a rescue. I added z-index: 3000 to not closest parent but 2 levels up in my case. Thanks.