I've been banging my head on this one. I want to absolute position an image that I will be moving around in a div and want anything that extends outside the div to be clipped. Here is an example of the problem:
<div style="width: 500px; height: 200px; border: 1px solid black; overflow: hidden;">
<div style="width: 200px; height: 50px; margin: auto; border: 1px solid black; background: gray;">On top of image.</div>
<div style="position: absolute; top: 10px; left: 250px; z-index: -1;"><img src="http://www.google.com/logos/worldcupfinale10-hp.gif" /></div>
Since the image's container is positioned absolutely, it is outside of the flow of the "containing" div.
Your choices are to either position relatively or to adjust the dimensions of the absolutely-positioned div, dynamically, with jQuery.