Some how my XHTML was not formatting properly. Firefox, added phantom spacing around an element, which I was not able to recover with the CSS. I found rails was sending a weird character where it merges the template with the view yield. That turned out to be the UTF8 BOM which was added by my previous text editors to the view files. Textmate does not add this and it wont remove if the file already has one. The worse part is, rails renderer send this to the browser as it is, even if it is in the middle of the XHTML.