It's in fact a picture.
See #navMain
in this page
Best in jQuery.
It uses multiple graphics in a single image file. It uses background position to adjust between the different menu items. Its CSS Sprite.
It reduces the amount of HTTP requests and improves performance.
Ues menu with animation or something simpler. The only thing you need to do is to add some active css style to outline selected menu item.
I agree. it uses 1 background image within the css file on hover. it could also be a wordpress plug-in since it is on wp.