I wish I could help you. I'm having similar problems with colors for static items. I'm trying to get my headers (the non links) to be boldface and the links (URL destinations) underlined but everything reverts to the same property. I've also tried to get rid of new links showing as blue (the client wants all links to be white text) with no luck.
My current menu control declaration:
<asp:Menu ID="Menu1" runat="server" BackColor="#B5C7DE" DataSourceID="SiteMapDataSource1"
DynamicHorizontalOffset="2" DynamicVerticalOffset="1" Font-Names="Arial" Font-Size="small"
ForeColor="White" StaticDisplayLevels="3" StaticSubMenuIndent="10px" Width="120px">
<StaticMenuItemStyle HorizontalPadding="2px" VerticalPadding="2px" BackColor="#005A00"
Font-Bold="False" ForeColor="White" />
<StaticSelectedStyle BackColor="#005a00" ForeColor="White" />
<StaticHoverStyle BackColor="#005a00" ForeColor="Yellow" />
<StaticMenuStyle BackColor="#005a00" ForeColor="white" Font-Bold="true" />
<DynamicMenuStyle BackColor="#005a00" ForeColor="White" />
<DynamicMenuItemStyle BackColor="#005a00" ForeColor="White" />
</asp:Menu>