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Just for the record...iMenu 2.3 is compatible with XOOPS 2.0.16. I'm not sure what the problem was, and you've got a menu working now, so that's great. If you do want to debug the issue in iMenu further, please post to the Formulize area on dev.xoops.org, accessible through:
http://www.freeformsolutions.ca/formulizeGood luck,
--Julian