Here's the fix, if anyone else is having this problem:
this "menu failure" is caused by confirmed bug in avast! 5.0.507. Until the fix is available (it will be included in the regular program update) please use the workaround below:
- right-click "My Computer" then select "Properties"
- open "Advanced" tab
- click "Settings" button in "Performance" section
- open "Visual Effects" tab
- disable (untick the box) "Fade or slide menus into view" then click "OK"
- click "OK" to close "System Properties" window
- restart your computer