The skins and their rendering changed a great deal between those releases. Regardless, there was a problem with the Internet explorer .rmText padding. It is already fixed, but the examples page will be updated when Q1 SP2 rolls out. As a workaround replace this rule in ApplicationStyles.css:
padding: 0 !important;
with these two:
padding: 0 0 0 50px !important;
div.RadMenu_Office2007Big .rmLevel2 .rmFirst .rmText
padding: 0 0 0 10px !important;
This should fix the issue in IE.
the Telerik team