If I'm not mistaken, the problem basically boils down to the way the menu is loaded from the database.
For example, i've got the 'actual' url of
http://bob.com/lvl1/lvl2/tabid/71/default.aspx
which, according to the friendly URL rules I've setup resolves to
http://bob.com/lvl1/lvl2/thispage.aspx
basically, I'm hiding the tabID.
So, when the menu is generated, it does't look through the friendly URL to see if there are any rules that are applicable. Instead, it just makes the href for the link have the tabID present in it, which, then fouls up all my child links deeper in the site.
Does that make sense?
Brian