Minz Meyer has a well done artile on Auto-height and margin-collapsing. The illustrations really help explain this behavior which I've always found as odd.
Margin-collapsing is when two vertical margins meet up, they merge. They don't stack up, but the larger margin takes precedence and the other one “collapses” away to make room. Make sense? Andy Budd has a useful post on margin collapsing that compliments Minzs' article very nicely.
Anyways, rather than try and rephrase the entire article, go read it. As I said, the illustrations alone are worth the trip. They will help make sense of the problem much more clearly than I could ever state.
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Posted at 06:30 AM