One of the unintended differences between a <div> tag and a <ol> or <ul> tag is that the list tags add 20px of padding at the top and bottom of the block to whatever is specified in the style properties.
In fact, using a <div><li></li><li></li></div> gives exactly the desired results. Although this workaround is apparently illegal- (question 2031725). I'm guessing this workaround is what the poster had in mind.
Firefox/Safari/IE share this behavior. Does this problem originate in the HTML specification? Is there another obvious work-around? This seems like an obvious flaw and I hear lots of complaints.