I have an application that calculates times for a timesheet.  Some
shifts are overnight, thus you run into a similar problem.  Although it
may be somewhat inefficient, here is my approach.

Column B always containts time in
Column C always contains time out
Desired value in the same row for Column E should be a fractional value
of hours.

For simplicity, I create two hidden columns to the right of the
timesheet, labeled Hour In and Hour Out.  The formulas, respectively,
are:
=HOUR($B143)+MINUTE($B143)/60
=HOUR($C143)+MINUTE($C143)/60

Then, the hour calculation (Column E) has the following formula:
=IF(M143>0,IF(M143>=N143,N143+24-M143,N143-M143),N143)

Where Column M and Column N are Hour In and Hour Out, respectively.

Hope that's helpful.

-Ilia