I think we should all clarify what browser we are using.
The automatic highlight does not work for me in Chrome(v24), Firefox(18.0.2), but does in IE(v9) and Safari(v5.1.7).
The selected item does get the "k-state-highlight" class assigned but just doesn't do what is expected except in IE and Safari.
My menu is define as:
And the markup for the "current" menu/page is:
"k-item k-state-highlight k-state-default"
But, the k-state-highlight does not work in Chrome/Firefox.
Using the blue-opal theme, in Chrome dev tools, the
is crossed out and
background-image: none, -webkit-linear-gradient.......
is in effect.
If I uncheck the "none" entry to force the highlight.png entry to take effect, it looks like it is working.
In IE, the highlight.png entry is in effect right away so it works without any changes.
I have attached a picture of the relevant Chrome CSS rules to show where it is getting mixed up.