I’ve looked at the document, and the reason it’s collapsing is because “body” is set to a percentage height (99.89%). You need to be careful with percentage heights, because there has to be a fixed height attached to the parent (or one of its ancestors) for the percentage to be calculated from. In this case, the parent item (“body-wrapper”) has a flexible (undefined) height, so CSS ignores the percentage value and calculates the height of “body” from its contents (background images don’t count as content).
It’s easy to fix this by changing the height of “body” to match the height of its background image. You can do this by selecting “body” and choosing “Fixed” from the Height popup in the Measurements section of the Inspector palette.
[The fact that Freeway’s layout doesn’t match what you see in the browser seems to be caused by some kind of circular miscalculation in Freeway. If you remove the percentage heights from “body” and its children, without setting a fixed height for “body”, Freeway’s layout matches what you see in a browser.]
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