!important just disables the normal cascade rules—meaning that this rule must apply even if a more specific height declaration would normally override this one. Generally, it's better not to use !important, as it indicates that things could be better coded from scratch. !important is really just a last resort option.
In this case, it might be meant to override the following declaration, which otherwise would override the height: auto rule.
The code looks a bit old, anyhow, as both IE5 and IE6 are dead and gone for all practical purposes.