I discovered that my favorites displayed correctly once I sorted them all into alphabetical order. Previously, those at the end which were not in order were not displayed. IE7 seems to recognise favorites which are in alphabetical order, and to ignore any which are out of order after the final Y's or Z's
My favorites make up two columns with a few left over. When I first click on the menu, the last few are missing, but when I move the mouse off the menu and back, the second column scrolls down to show the last few.
This is all rather odd, and not very intuitive. What was wrong with the old style favorites menu

Incidentally, there is a check box in Tools/Internet Options/Advanced to 'Enable Personalized Favorites Menu', but it does not seem to have any effect
