I have a div that I want to specify a FIXED width and height for, and also a padding which can be changed without decreasing the original DIV width/height or increasing it,
Sounds like you're looking to simulate the IE6 box model. You could use the CSS 3 property box-sizing: border-box to achieve this. This is supported by IE8, but for Firefox you would need to use -moz-box-sizing and for Safari/Chrome, use -webkit-box-sizing.
IE6 already computes the height wrong, so you're good in that browser, but I'm not sure about IE7, I think it will compute the height the same in quirks mode.