I noticed a small "gotcha" today with ListToolsFile.xml. I've written some C# code to generate XML from a SharePoint list to drive the Custom Links tool dropdown contents (the list of links within the<links> elements). I had inadvertently spelled "link" with a capital "L" in the XML that I was generating. With the capital "L", links within a folder (or group in Custom Links) weren't being displayed. Changing the "L" to an "l" solved the problem.
See my blog post
for more details or if you are unfamiliar with ListToolsFile.XML.