Have you check the location where you added the button in the list applet? If you add the control to the specific control location like "new","query" they might appear odd. Check also the button's property "HTML Bitmap" - it should be empty.
As Pirkka mentioned, with post-IP17 Siebel the applet "edit weblayoyut" is only in WebTools and it doesn't work well. If you are using this version of Siebel, you might want to remove check the applet webtemplate item and ensure the SEQUENCE number assigned to it is correct. Just edit it in that list reference. My experience with the latest Siebel versions is that just adding the applet webtemplate item record directly is the best approach.
Check the underlying webtemplate that is used for your applet. Make sure that the sequence number assigned at the applet webtemplate item level for your control is actually corresponding to a control section in the underlying list applet webtemplate.
Is the applet and/or webtemplate custom? If it is OOTB, can you share the names?
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