I think you're missing something.
http://jsfiddle.net/ZNtKj/
<ul>
<li style="height:100px;overflow:hidden;">
<div style="height:500px; background-color:black;">
</div>
</li>
</ul>
<ul>
<li style="height:100px;">
<div style="height:500px; background-color:red;">
</div>
</li>
</ul>
In FF4, this displays a 100px black bar, followed by a 500px red block.
A little bit different example:
http://jsfiddle.net/ZNtKj/1/
<ul>
<li style="height:100px;overflow:hidden;">
<div style="height:500px; background-color:black;">
</div>
</li>
</ul>
<ul>
<li style="height:100px;">
<div style="height:500px; background-color:red;">
</div>
</li>
<li style="height:100px;overflow:hidden;">
<div style="height:500px; background-color:blue;">
</div>
</li>
<li style="height:100px;overflow:hidden;">
<div style="height:500px; background-color:green;">
</div>
</li>
</ul>