DotNetNuke is a solid core framework for a web portal application, and as a framework lends itself to customization and expansion.  There are many, many extensions (custom modules) available.

Image-based menus can be done, but not out of the box. Your best bet may be to use an alternate menu system for this.

You need a login link in order to gain administrative control of the site!

Have you read the Skinning Guide?  It's a little outdated, but most everything you'll need to know is there.

Another good source of skinning knowledge is the DNN Skinning Toolkit.

The menu rollover style is controlled in CSS by .MainMenu_MenuItemSel {}.

Change the header graphic for each page - John Mitchell tells how to do this dynamically in his blog, or if you want something simple you could just make the header a Content Pane. 

Flash based menus - most have shyed away from this for usability and SEO reasons... it has been done, though.

There are many approaches to skinning, and I personally learn most things by example. I dont mind reading very short and to the point manuals - otherwise you may learn faster with looking at a well formed skin pack.

Salar