Problem: Your flash animation has priority over navigation bar menu options. When you hover over a menu item, the drop down list is hidden behind the flash animation. I've encountered this problem in Wordpress and in other CMS applications.
Solution: You need to add the following line:
param name="wmode" value="transparent"
In Dreamweaver, you can click the opject in design mode and add the parameter. Copy the code below for a working example.