rab I'm not 100% sure about you mean by expandable, but I'm assuming you want the left side to expand to meet the height of the main content area.
What I would do is wrap all of your code in a container div with an id of container. Then the css to center it would be:
div#container {width:800px; margin:0 auto}
That will center your page. I think you used 800px as your width. I'd suggest a little less if you're trying to get the page to work at 800x600 resolution. I usually use 760px, but some people go as high as 780px.
Then to get the left side to expand down you can actually apply a little trick. Give the same container div a background color that's the same as you left side, so:
div#container {background-color:#619af3}
The left side really won't be expanding but it will look like it has. You may need to set the white background on the page div. The white border you have will probably need to be moved to the new container div as well.
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rab I see the problem. What's going on is that when you've used postioning on the elements you've taken them out of the normal document flow. What that means is that the container divs aren't expanding where you think they will since what's inside of them has actually been removed for the flow.
I played around with some of the css and got things to basically work. There's still a few details to get working better, but this should give you the overall structure you want.