I am running XMenu 1.8 on 10.4.7, and it does not appear to support labels. That is, icons in XMenu menus are not coloured as they are in the Finder. Is this right, and is it planned to add support for labels?
Once you are used to colour-coding items, monochrome menus seem very unhelpful.
(I am also using Unsanities Labels X, so it is possible that there is a conflict there.)