There is two samples. As it seems to me they suppose to render identicaly like that:
Opera 6, 7, 8; IE 5.0, 5.5, 6.0, 5.0 Mac; iCab 3 render similar to presented screenshot. Firefox 1.0 renders first sample with extra space.
Firefox 1.5 and Safari 2.0.3 render first sample differently.
Opera 9 ß renders samples 1 and 2 same way as Firefox and Safari.
ul, li, dl, dt, dd, p { margin:0; padding:0; list-style: none; line-height: 1em }
ul { margin-bottom: 1em }
li { float: left }
dt, p { background: #09F }
<dl>
<dt>List 1</dt>
<dd>
<ul>
<li><a href="">Link 1</a></li>
<li><a href="">Link 2</a></li>
<li><a href="">Link 3</a></li>
</ul>
</dd>
</dl>
<p>List 1</p>
<ul>
<li><a href="">Link 1</a></li>
<li><a href="">Link 2</a></li>
<li><a href="">Link 3</a></li>
</ul>