Strange.  I found in my personal website the Child menus were not showing when I hovered over the root menu item.

There is nothing special about the menus.  They are standard asp:menu items created when I dragged the menu tool from the navigation tools in Visual Studio 2008.

UPDATE: Fix

http://support.microsoft.com/kb/962351

Has the hotfix to apply to your server. 

In my case my site was hosted by another company and I did not have access to update asp.net on the server, so I chose workaround #2.

I found two workarounds:

1.  Add the IE7 compatability Meta information: IE=EmulateIE7
http://msdn.microsoft.com/en-us/library/cc288325(VS.85).aspx#SetMode

2.  Add this style:

.DynamicMenuZIndex

{

z-index: 999;

}

    and then apply it to the menu:

<DynamicMenuStyle CssClass="DynamicMenuZIndex"/>

 

Let me know if this helped you!