you applied the style before calling the class, you have to do the opposite... also, put the hidden fields outside the table, if possible, to stop the br like event...
HTML Code:
<!-- Search Box -->
<form action="http://www.sevenstring.org/forum/search.php" method="post">
<input type="hidden" name="do" value="process" />
<input type="hidden" name="showposts" value="0" />
<input type="hidden" name="quicksearch" value="1" />
<td style="background: #333333 url(http://www.sevenstring.org/forum/images/misc/snav_gradient.jpg);" valign="middle" class="alt1" width="250"><input type="text" style="width:100px;" class="bginput" name="query"/> <input style="font: bold 10px Arial" type="submit" class="button" value="Search" /><input type="hidden" name="s" value="" /></td>
</form>
<!-- /Search -->
would be more like it to be XHTML compliant.. but outside the table is better