Does the product web_panel exist?
Also change all instances of <phrase> </phrase> to <text> </text> unless of course you actually created the phrases.
So something like this:
Code:
<?xml version="1.0" encoding="ISO-8859-1"?>
<navgroups product="vbulletin">
<navgroup text="Menu Name" permissions="canadminthreads" displayorder="82">
<navoption displayorder="10">
<text>Test1</text>
<link></link>
</navoption>
<navoption displayorder="20">
<text>test2</text>
<link></link>
</navoption>
<navoption displayorder="30">
<text>test3</text>
<link></link>
</navoption>
</navgroup>
</navgroups>