Hi, i found a workable way to edit menus.

you will need vim from maemo.org
http://maemo.org/downloads/product/vim/

then install xmllint via apt-get libxml2-utils

then follow instructions on this page to add an xml parser to vim
http://www.vim.org/tips/tip.php?tip_id=1366

then execute vim ~/.osso/menus/applications.menu

then type :PrettyXML and your menu xml structure will be formatted to human-readable form.

edit and save your menus, taking care to preserve correct structure - starting tags must have matching closing tags for e.g.

when hitting the menu for the first time, i get some errors (menu closes again) but hitting menu second time works.

--------------------
example

<Menu>
<Name>Media</Name>
<Include>
<Filename>mplayer.desktop</Filename>
<Filename>streamtuner.desktop</Filename>
<Filename>maemo_recorder.desktop</Filename>
<Filename>osso-music-player.desktop</Filename>
<Filename>video-player.desktop</Filename>
</Include>
</Menu>

Um... Couldn't we do that already? In control panel? What menus are you editing here exactly?

At a guess - it's the directory entries in the menus. I can't seem to edit the names of the menu folders in the control panel for example (only way I can do anything like that is to create a new folder, move items into it and delete the old one.)

That, and there were leftovers from applications that i uninstalled but which had leftover menu entries - couldn't delete them with 'Task navigator'

I usually just dump a custom whatever.desktop file in the /usr/share/applications/hildon directory and it automagically winds up in the Extras sub-menu where I then move it using the control panel application.
It's not as "high-geek" as ArnimS's method, but it frickin' works and works fast.