Top Menu Subcategory Text Padding? V 1.6

[endlessxpressions]

I use PS 1.5 on m other site.. building a new site with 1.6

What is odd, is that the top menu category drop down moves to a weird padding when you click. AND the subcategory text is really "squished"

 

Anyone advise how to fix? 

 

You can see what im talking about at my test site  shophodgepodge.com/store 

 

I dont want that top menu to move when hoover and I want the drop down subcategories to have more text spacing / padding as my other site.