OK. I fixed this after 2 days of pulling my hair (err... I'm bald) out! For some reason, in AdminCP > Style Style&Language Settings, this setting "Use 'vBMenu' DHTML Popup Menus?" set to "Yes" was not taking. I manually edited forums/global.php and made the change below:
Old
$vbulletin->options['usepopups'] = 0;
New
$vbulletin->options['usepopups'] = 1;
Don't know why this would not take effect from the front-end. Oh well.
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