Modify your html as follows and it should work. Div always takes the height of it's container, so by setting the height of body and table to 100% should work.
<body style="height:100%">
<form id="form1" runat="server">
<table border="1" style="height:100%">
<tr>
<td valign="top" style="height:100%">
<div style="height:auto">
</div>
</td>
<td valign="top">
Dynamic content, height varies
</td>
</tr>
</table>
</form>
</body>
<body style="height:100%">
<form id="form1" runat="server">
<table border="1" style="height:100%">
<tr>
<td valign="top" style="height:100%">
<div style="height:auto">
</div>
</td>
<td valign="top">
Dynamic content, height varies
</td>
</tr>
</table>
</form>
</body>
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