I am trying to understand a problem in my web development.  I am developing in an XP environment with IE 8.    To get to the route of the problem, I developed a very simple web page.
It basically consists of two elements.  A body (with a red background) and a Div (with a green background).   I set the height of the div to 100%.   I would expect the div to fill the page since both height and width are 100%.   But instead I get a thin div, maybe half a cm in height that stretches nearly to the left and right edges of the page.    If I specify the height of the div as an absolute number of pixels (e.g. 512px)  I can increase the height of the div.   But this is not going to work for me since I need to accommodate users with different screen resolutions.    There is something fundamental that I am not getting here.    Can someone help me?   
Here is the content of the page:
<!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN"      
"http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd">
<html xmlns="http://www.w3.org/1999/xhtml">
<head>
  <meta http-equiv="X-UA-Compatible" content="IE=EmulateIE7" />
 <title>TEST</title>
 <link href="css/stylesheet.css" type="text/css" rel="stylesheet" media="all"/>
</head>
 <body>
   <div id="container">
    </div>
</body>
 </html>
And here is the style sheet associated with the page.
     body
  {
text-align:center;
    background-color:red; 
  }
  #container
  {
width:100%;
height:100%;
  background-color:green; 
 }
 
    