it inherits the 90%, but relative to its parent, which is 90% but that, to the child, is like 100%.. oh well you get it :) here's my fiddle: http://jsfiddle.net/DL6Vj/4/
<div style="height:90%; display:block;width:50%;float:left;background:tan">
<div id="second" style="height:inherit;background:red">
<div id="third" style="height:inherit;background:pink"></div>
</div>
</div>
<div style="height:73%; display:block;float:left;width:50%;background:green"></div>
if compared to the absolute 100% of the body yes, it's a 73% height approx