It's because you removed the height from the divs. After each line of products, which you need to calculate with the columns parameter, you should add this line of HTML
<div style="clear:both"></div>
I tried to add it manually with firebug and it did the job correctly.
Actually, since not all your products have the same height, the products on the line below get moved to the right. That's why we had a height there
We might do this change on or and so users will have one less option in the module options but will still be able to add a height with the CSS.