This seems to be problem with upgrading Xfce from version 4.6 to 4.8
Doesn't seem to matter how you upgraded, either manually or the repros automatically did it.
Seems to be a problem with integrating the new 4.8 panel Menu into the old applications.menu
The original/old applications menu
file was changed and the new 4.8 panel doesn't know what to do?
I have searched through the Xfce Forums and Xfce/Wiki but do not find any solution, other than to first remove/purge the old Xfce4.6 before upgrading to 4.8.
In my LMDX install ... I am just using the 'mixed-up' panel menu, as is.
I know where the applications.menu file was kept, but it's not there. I suppose if you have access to another system that still has the old applications.menu, you could copy and paste it to 'somewhere' ... might work.