I'm sorry, but we are not able to reproduce the problem. I've tested your application on a Windows XP machine with SP3 installed and it worked without any issues.
You may check Microsoft forums for this problem or even better post your question there.
The menu opens a simple Popup and displays its child controls there. We have prepared a very small project that simulates the menu behavior but with framework assemblies only. If it works on your side we will at least be sure if the problem is in our menu or from the framework.
To me personally it looks like a problem with the video drivers. On the video it looks like the popups fight with the main window for airspace
. Do you have other computers with XP installed but with different hardware configuration so you could also test the app there?
the Telerik team