I agree that it should have the desired effect. I know the CSS is working properly to load those items as I'm able to modify...
...the background image
...the height
...the cursor
Here is the actual code I have in the skin-aqua.css file
div.dynarch-horiz-menu table tr td.hover { background: url("img/aqua/hover-bg.png"); cursor:hand; color: #fff; }

I also tried changing the skin-aqua.css file as it exists in the examples included in the install, just to make sure I hadn't misloaded something on my page. Unfortunately the same results are reached. No matter what skin css I modify, aqua, windows xp, windows 98, I am unable to change the text color on hover of the horizontal items. I have not tried them all but am assuming its the same on all skins.

Thanks,
-Kirk