interesting you should mention the chosen plugin from harvest. that is actually why I am asking about this. I am currently using that plugin which is awesome but I have multiple select boxes on my form and am running into z-index issues in all versions of IE (all other browsers are fine).
I actually posted on the developers page and he replied and said that it shouldn't do that in IE7+ but it clearly does. so my solution was to remove the chosen styling from all but a few selects on the page (which don't overlap), and then manually style the remaining selects to visually match so that they dont look to out of place.
Have you had any experience with z-index issues in IE using the chosen plugin? I would love to just use chosen on all the selects on the page.