A: 

I'm just finishing up a mobile site project and ran in to some similar issues. First, I would reconsider your HTML structure with the div's inside of anchor. I'm not sure that fits the HTML spec. I know that the webviews and safari and all the other mobile devices handle html validation differently, some more strict than others so watch out for that and be sure to validate your doc type and content type. Content type is still burning me on pages. Second, to get the tap highlight to work you have to put in on a higher node and then it will only apply to anchors I think. so you could do something like this on the body with CSS:

body {
    -webkit-tap-highlight-color: #ccc;
}

Third, couldn't you try an onlick="window.location=your href;"...

Hope this helps, or gives you an idea of what to watch out for.

Kyle LeNeau
You're right, the DIV element isn't allowed inside the <A> according to spec. I tried replacing <div> with <span> but it makes no difference
Malcolm Box
Just tried it on the body and no difference - still not getting a tap-highlight. This is driving me crazy.
Malcolm Box