first example

This first example is a flexible width top level list that expands to fit the text.
It has a fixed height and uses a background image that stretches the full width of the outer div, in this case 750px, and a background div in each top level link to mark the right hand edge of the link.

The top level hover varies the text color and the bottom border color.
The sub level hover varies the background color and adds a background square bullet against the top line of each list item. Sub level drop down lists can be positioned anywhere (left/right) beneath the top level list.

The sub levels are a fixed size, but can easily be changed to suit your requirements, and have a single pixel border.
Sub level flyouts are indicated by a sub level link with a grey background and a square bullet. These flyouts can be made to appear to the right or the left of the sub level list.