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To center something horizontally, you set its left and right margins to "auto". If you want it to work in IE5.x, you need to use "text-align: center" on the containing element and then apply "text-align: left" to the element you are centering so its text does not center (unless you want it to be centered). So change your CSS to this:
#navigation {
height: 20px;
margin: 0;
padding: 0;
position: relative;
text-align: center;
}
#navigation ul {
width: 304px;
height: 20px;
background-image: url(img/nav_bg.gif);
list-style: none;
padding: 0;
margin: 0 auto;
text-align: left;
}
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