If you are using tables for the content below the menu you can try this:
Make one table with 2 columns, first column for left side info then the second column for your main content.
Inside the first and second columns you can put tables again to control the layout of the page.
Doing this should enable both columns to expand to unlimited height.
As for the menuitems separating check that you've specified cellspacing="0", cellpadding="0" and border="0" in your table tag. Also border="0" in your image tags if they are links.