What this means is that if you build a list with no changes to the padding or margin, IE will add margin to the UL element and Firefox will add padding.
You can see this in the picture on this page. I added a background color and a purple outline to the UL so that you could see what it was affecting.
The Safari sample is grey out to the left edge of the element, including the list markers. The Internet Explorer sample is grey only under the list items.