ASP.NET Panels are expected to render as
Though this sounds like another strike in the browser wars between IE and Firefox, apparently it is an accident of the development schedule of ASP.NET 1.1. Firefox's usage expanded so quickly after its initial release, that ASP.NET's handling of it was quickly out of date.
Rendering to Firefox from ASP.NET
The article also discusses other differences and things to look out for when using ASP.NET with Firefox.