CSS overflow IE error

In my site I have a div with content that is filled via some AJAX. In my CSS file I have these rules for the div:

font-size: 8pt;
background: #000000;
color: #FFFFFF;
padding: 4px;
height: 170px;
overflow: auto;

In FF this works fine. When the div is overfilled it puts the scroll bar in to scroll down through the text.

In IE however it does something strange. It cuts off the output so all you can see is the top line and part of the second line. When I take the overflow rule out it displays properly again but the div extends downwards to encompass the text.

Anyone know why this is happening?