The offset happens due to the "5px none" setting at "Border around all menu items" which gets applied to both the single menu tabs and the underlying menu bar but interpreted differently for the menu bar, should be
solid 1px #123456
To make the tabs bigger by adding more padding see
http://forum.bytesforall.com/showthread.php?t=130 post #5
As for the 1px border, this menu compensates the 1px at other places, whatever you do I'd try to keep that at 1px or maybe try 0px or
solid 1px transparent
or
solid 1px inherit
The menu is prepared to be "without borders" (by setting border color = background color) in the first level but not to be without border in the 2nd and 3rd etc levels, too. At least it will probably not be perfectly aligned if you attempt to get different background colors for 1st and following levels, and no visible borders on any level.