>A mouseout event will fire but intervening ones may be skipped.

Correct

>Can you clarify 'the logic determines that one of the two needs to become hidden' and show a simple html of the divs involved ?

I succeeded to bring this down to a very simple, simpler, page to use for this test sequence.

You will have two labels on top. If you move the mouse over the labels, a menu appears. You may add a background color to the place holder div to understand better what I am saying. The place holder is tied to its menu but cannot be in it as its width varies based on the label. So, a transparent div is used over the label so we know that when the mouse moves out of the placeholder, that this is also considered a menu mouseout. So, we have two mouseout to watch for. There is the placeholder and the menu. There is some logic to verify that a mouseout going down the placeholder, thus over the active menu, won't trigger a deactivate. Then, in reverse, a mouseout of the menu, going over the placeholder, won't trigger a deactivate also.