diff --git a/src/effects.js b/src/effects.js
index 56141bb29..3257ac395 100644
--- a/src/effects.js
+++ b/src/effects.js
@@ -13,45 +13,41 @@ var elemdisplay = {},
 		[ "opacity" ]
 	];
 
+function defaultDisplay(nodeName) {
+	if ( !elemdisplay[ nodeName ] ) {
+		var elem = jQuery("<" + nodeName + ">").appendTo("body"),
+			display = elem.css("display");
+
+		elem.remove();
+
+		if ( display === "none" || display === "" ) {
+			display = "block";
+		}
+
+		elemdisplay[ nodeName ] = display;
+	}
+
+	return elemdisplay[ nodeName ];
+}
+
 jQuery.fn.extend({
 	show: function( speed, easing, callback ) {
-		if ( speed || speed === 0) {
+		if ( speed || speed === 0 ) {
 			return this.animate( genFx("show", 3), speed, easing, callback);
-
 		} else {
-			for ( var i = 0, l = this.length; i < l; i++ ) {
-				var old = jQuery.data(this[i], "olddisplay");
-
-				this[i].style.display = old || "";
-
-				if ( jQuery.css( this[i], "display" ) === "none" ) {
-					var nodeName = this[i].nodeName, display;
-
-					if ( elemdisplay[ nodeName ] ) {
-						display = elemdisplay[ nodeName ];
-
-					} else {
-						var elem = jQuery("<" + nodeName + ">").appendTo("body");
-
-						display = elem.css("display");
-
-						if ( display === "none" ) {
-							display = "block";
-						}
-
-						elem.remove();
-
-						elemdisplay[ nodeName ] = display;
-					}
-
-					jQuery.data(this[i], "olddisplay", display);
+			for ( var i = 0, j = this.length; i < j; i++ ) {
+				// Set elements which have been overridden with display: none
+				// in a stylesheet to whatever the default browser style is
+				// for such an element
+				if ( jQuery.css( this[i], "display" ) === "none" && this[i].style.display !== "none" ) {
+					jQuery.data(this[i], "olddisplay", defaultDisplay(this[i].nodeName));
 				}
 			}
 
 			// Set the display of the elements in a second loop
 			// to avoid the constant reflow
-			for ( var j = 0, k = this.length; j < k; j++ ) {
-				this[j].style.display = jQuery.data(this[j], "olddisplay") || "";
+			for ( i = 0, j = this.length; i < j; i++ ) {
+				this[i].style.display = jQuery.data(this[i], "olddisplay") || "";
 			}
 
 			return this;
@@ -115,6 +111,9 @@ jQuery.fn.extend({
 		}
 
 		return this[ optall.queue === false ? "each" : "queue" ](function() {
+			// XXX ‘this’ does not always have a nodeName when running the
+			// test suite
+
 			var opt = jQuery.extend({}, optall), p,
 				hidden = this.nodeType === 1 && jQuery(this).is(":hidden"),
 				self = this;
@@ -132,12 +131,32 @@ jQuery.fn.extend({
 					return opt.complete.call(this);
 				}
 
-				if ( ( p === "height" || p === "width" ) && this.style ) {
-					// Store display property
-					opt.display = this.style.display;
-
+				if ( ( p === "height" || p === "width" ) ) {
 					// Make sure that nothing sneaks out
 					opt.overflow = this.style.overflow;
+
+					// Set display property to inline-block for height/width
+					// animations on inline elements that are having width/height
+					// animated
+					if ( jQuery.curCSS( this, "display" ) === "inline" &&
+					jQuery.curCSS( this, "float" ) === "none" ) {
+						if ( !jQuery.support.inlineBlockNeedsLayout ) {
+							this.style.display = "inline-block";
+						} else {
+							var display = defaultDisplay(this.nodeName);
+
+							// inline-level elements accept inline-block;
+							// block-level elements need to be inline with layout
+							if ( display === "inline" ) {
+								this.style.display = "inline-block";
+							}
+							else {
+								this.style.display = "inline";
+								jQuery.data( this, "oldzoom", this.style.zoom );
+								this.style.zoom = 1;
+							}
+						}
+					}
 				}
 
 				if ( jQuery.isArray( prop[p] ) ) {
@@ -303,11 +322,6 @@ jQuery.fx.prototype = {
 		}
 
 		(jQuery.fx.step[this.prop] || jQuery.fx.step._default)( this );
-
-		// Set display property to block for height/width animations
-		if ( ( this.prop === "height" || this.prop === "width" ) && this.elem.style ) {
-			this.elem.style.display = "block";
-		}
 	},
 
 	// Get the current size
@@ -384,17 +398,9 @@ jQuery.fx.prototype = {
 			}
 
 			if ( done ) {
-				if ( this.options.display != null ) {
-					// Reset the overflow
+				// Reset the overflow
+				if ( this.options.overflow != null ) {
 					this.elem.style.overflow = this.options.overflow;
-
-					// Reset the display
-					var old = jQuery.data(this.elem, "olddisplay");
-					this.elem.style.display = old ? old : this.options.display;
-
-					if ( jQuery.css( this.elem, "display" ) === "none" ) {
-						this.elem.style.display = "block";
-					}
 				}
 
 				// Hide the element if the "hide" operation was done
diff --git a/src/support.js b/src/support.js
index 299fbd277..878db1f0b 100644
--- a/src/support.js
+++ b/src/support.js
@@ -66,6 +66,7 @@
 		scriptEval: false,
 		noCloneEvent: true,
 		boxModel: null,
+		inlineBlockNeedsLayout: false,
 		reliableHiddenOffsets: true
 	};
 
@@ -119,6 +120,17 @@
 		document.body.appendChild( div );
 		jQuery.boxModel = jQuery.support.boxModel = div.offsetWidth === 2;
 
+		// Check if natively block-level elements act like inline-block
+		// elements when setting their display to 'inline'
+		// (IE < 8 does this)
+		if ( 'zoom' in div.style ) {
+			div.style.display = 'inline';
+
+			// Layout is necessary to trigger this “feature”
+			div.style.zoom = 1;
+			jQuery.support.inlineBlockNeedsLayout = div.offsetWidth === 2;
+		}
+
 		// Check if table cells still have offsetWidth/Height when they are set
 		// to display:none and there are still other visible table cells in a
 		// table row; if so, offsetWidth/Height are not reliable for use when
diff --git a/test/data/testsuite.css b/test/data/testsuite.css
index 184689209..cffaaa46a 100644
--- a/test/data/testsuite.css
+++ b/test/data/testsuite.css
@@ -102,6 +102,8 @@ div.chain.test div { background: green; }
 div.chain.out { background: green; }
 div.chain.out div { background: red; display: none; }
 
+/* tests to ensure jQuery can determine the native display mode of elements
+   that have been set as display: none in stylesheets */
 div#show-tests * { display: none; }
 
 #nothiddendiv { font-size: 16px; }
diff --git a/test/index.html b/test/index.html
index d858114b1..262bd9a92 100644
--- a/test/index.html
+++ b/test/index.html
@@ -55,8 +55,8 @@
 	</div>
 	<!-- this iframe is outside the #main so it won't reload constantly wasting time, but it means the tests must be "safe" and clean up after themselves -->
 	<iframe id="loadediframe" name="loadediframe" style="display:none;" src="data/iframe.html"></iframe>
-	<dl id="dl" style="display:none;">
-	<div id="main" style="display: none;">
+	<dl id="dl" style="position:absolute;top:-32767px;left:-32767px;">
+	<div id="main">
 		<p id="firstp">See <a id="simon1" href="http://simon.incutio.com/archive/2003/03/25/#getElementsBySelector" rel="bookmark">this blog entry</a> for more information.</p>
 		<p id="ap">
 			Here are some links in a normal paragraph: <a id="google" href="http://www.google.com/" title="Google!">Google</a>, 
diff --git a/test/unit/css.js b/test/unit/css.js
index cfffb7832..02a7b084c 100644
--- a/test/unit/css.js
+++ b/test/unit/css.js
@@ -3,7 +3,7 @@ module("css");
 test("css(String|Hash)", function() {
 	expect(29);
 
-	equals( jQuery('#main').css("display"), 'none', 'Check for css property "display"');
+	equals( jQuery('#main').css("display"), 'block', 'Check for css property "display"');
 
 	ok( jQuery('#nothiddendiv').is(':visible'), 'Modifying CSS display: Assert element is visible');
 	jQuery('#nothiddendiv').css({display: 'none'});
diff --git a/test/unit/effects.js b/test/unit/effects.js
index b9d5c8841..284eec3f8 100644
--- a/test/unit/effects.js
+++ b/test/unit/effects.js
@@ -1,5 +1,10 @@
 module("effects");
 
+test("sanity check", function() {
+	expect(1);
+	ok( jQuery("#dl:visible, #main:visible, #foo:visible").length === 3, "QUnit state is correct for testing effects" );
+});
+
 test("show()", function() {
 	expect(23);
 	var pass = true, div = jQuery("#main div");
@@ -87,7 +92,10 @@ test("show(Number) - other displays", function() {
 	};
 
 	jQuery.each(test, function(selector, expected) {
-		var elem = jQuery(selector, "#show-tests").show(1, function() {
+		// IE sometimes has issues with chained functions referencing
+		// assignments from outside the closure
+		var elem = jQuery(selector, "#show-tests");
+		elem.show(1, function() {
 			equals( elem.css("display"), expected, "Show using correct display type for " + selector );
 			if ( ++num === 15 ) {
 				start();
@@ -116,6 +124,71 @@ test("animate negative height", function() {
 	});
 });
 
+test("animate inline width/height", function() {
+	expect(3);
+	stop();
+	jQuery("#foo").css({ display: "inline", width: '', height: '' }).animate({ width: 42, height: 42 }, 100, function() {
+		equals( jQuery(this).css("display"), jQuery.support.inlineBlockNeedsLayout ? "inline" : "inline-block", "inline-block was set on non-floated inline element when animating width/height" );
+		equals( this.offsetWidth, 42, "width was animated" );
+		equals( this.offsetHeight, 42, "height was animated" );
+		start();
+	});
+});
+
+test("animate block width/height", function() {
+	expect(3);
+	stop();
+	jQuery("#foo").css({ display: "block", width: 20, height: 20 }).animate({ width: 42, height: 42 }, 100, function() {
+		equals( jQuery(this).css("display"), "block", "inline-block was not set on block element when animating width/height" );
+		equals( this.offsetWidth, 42, "width was animated" );
+		equals( this.offsetHeight, 42, "height was animated" );
+		start();
+	});
+});
+
+test("animate table width/height", function() {
+	expect(1);
+	stop();
+
+	var displayMode = jQuery("#table").css("display") !== "table" ? "block" : "table";
+
+	jQuery("#table").animate({ width: 42, height: 42 }, 100, function() {
+		equals( jQuery(this).css("display"), displayMode, "display mode is correct" );
+		start();
+	});
+});
+
+test("animate table-cell width/height", function() {
+	expect(3);
+	stop();
+	var td = jQuery("#table")
+		.attr({ "cellspacing": 0, "cellpadding": 0, "border": 0 })
+		.append("<tr><td style='width:42px;height:42px;padding:0;'><div style='width:20px;height:20px;'></div></td></tr>")
+		.find("td");
+
+	// IE<8 uses “block” instead of the correct display type
+	var displayMode = td.css("display") !== "table-cell" ? "block" : "table-cell";
+
+	td.animate({ width: 10, height: 10 }, 100, function() {
+		equals( jQuery(this).css("display"), displayMode, "display mode is correct" );
+		equals( this.offsetWidth, 20, "width animated to shrink wrap point" );
+		equals( this.offsetHeight, 20, "height animated to shrink wrap point" );
+		start();
+	});
+});
+
+test("animate resets overflow-x and overflow-y when finished", function() {
+	expect(2);
+	stop();
+	jQuery("#foo")
+		.css({ display: "block", width: 20, height: 20, overflowX: "visible", overflowY: "auto" })
+		.animate({ width: 42, height: 42 }, 100, function() {
+			equals( this.style.overflowX, "visible", "overflow-x is visible" );
+			equals( this.style.overflowY, "auto", "overflow-y is auto" );
+			start();
+		});
+});
+
 /* // This test ends up being flaky depending upon the CPU load
 test("animate option (queue === false)", function () {
 	expect(1);