This was a css issue but also related to JBPORTAL-1769 where clicking on maximize, minimize etc. buttons in IE7 don't work most of the time.
One of the files changed to fix this(JBPORTAL-1769) seems to have been undone by JBPORTAL-1874. The file in question is /branches/JBoss_Portal_Branch_2_6/theme/src/main/org/jboss/portal/theme/impl/render/div/DivDecorationRenderer.java
So, the question is why was this change undone - is it being fixed indirectly elsewhere? I manually added the change back in and it fixes the original problem in JBPORTAL-1769 but the portlet title and mode buttons display outside the portlet container image.
Further details at:
Thanks for the report. This indeed seems to be in issue on IE7.
Clicking on potlet window decorator does not seem to work all the time. I have created a jira: https://jira.jboss.org/jira/browse/JBPORTAL-2226