dont use div:hover its not crossbrowser compatible.
use a:hover instead.
sample:
Code:
<ul>
<li><a href="#">Menu1</a></li>
<li><a href="#">Menu2</a></li>
<li><a href="#">Menu3</a></li>
<li><a href="#">Menu4</a></li>
</ul>
and in css:
Code:
ul{width: 300px; list-style: none}
li{line-height: blah blah blah}
a{display: block; blah bla blah}
a:hover{background: url(images/hoverBG.jpg) no-repeat}
just alter the above code if you want the background extend outside