Which versions of FireFox 2 and 3 are you using? I am asking for this, because when 3.0 was released, it came with a number of CSS bugs, which were fixed later, and the hover problem is already gone. I've tested your scenario with version 3.0.4 (latest) and everything seems to work like charm, as it is seen on the screenshots I have attached - there is no dashed line and there is a hover style.
However, there is an issue with FireFox 18.104.22.168, which can be fixed by adding float: left to the skinned buttons. In version 3x FireFox finally implemented the display: inline-block property and this allowed us to remove certain vendor-specific CSS properties from our code, and this is why in some cases issues emerge with older versions of FireFox, but as they release it every 3-4 weeks we decided to drop certain features and to support better CSS, as this allowed decrease in the size of the stylesheets and easier maintenance.
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