Have you pressed CTRL+F5?? It looks like you have a different theme loaded in from your cache.
It's been tested with default settings in IE 7 and FF 1.5 + 2 (yes with the last update) - thanks for the heads up about IE6 though!
Shall look into the sub-folders issue soon, perhaps tommorrow - certainly next week, there is one or two other things that need addressing as well.