can't figure out how to make that ugly blue highlight go away over the all programs when I mouse over. I'd like to use the item mouseover image for it instead.
Yup. If you skin the image, the color won't show up. If you are planning on an xp substyle, you will however need to change the color of the mouseover. You'll find that in: Change skin colours ->show me the skin defined skin colours -> menu highlight.
Here is what I have so far
Coming along nicely, there! 