diff --git a/lib/javascript-navigation.js b/lib/javascript-navigation.js
index 6fe7d9c8d8f..1b90d619467 100644
--- a/lib/javascript-navigation.js
+++ b/lib/javascript-navigation.js
@@ -146,6 +146,9 @@ navigation_tree.prototype.toggleexpansion = function(e) {
     YAHOO.util.Event.stopPropagation(e);
     var target = YAHOO.util.Event.getTarget(e);
     var parent = target.parentNode;
+    while (parent.nodeName.toUpperCase()!='LI') {
+        parent = parent.parentNode;
+    }
     if (YAHOO.util.Dom.hasClass(parent, 'collapsed')) {
         YAHOO.util.Dom.removeClass(parent, 'collapsed');
     } else {
@@ -441,6 +444,9 @@ navigation_tab_panel.prototype.create_tab_panel = function () {
     var navbar  = document.createElement('div');
     navbar.style.display = 'none';
     navbar.setAttribute('id', 'sidebarpopup');
+    var navbarspacer = document.createElement('div');
+    navbarspacer.style.height = '10px';
+    navbar.appendChild(navbarspacer);
     YAHOO.util.Dom.addClass(navbar, 'navigation_bar');
     if (YAHOO.env.ua.ie > 0 && YAHOO.env.ua.ie < 7) {
         YAHOO.util.Dom.setStyle(navbar, 'height', YAHOO.util.Dom.getViewportHeight()+'px');
@@ -625,6 +631,7 @@ navigation_tab_panel.prototype.show_tab = function (e, tabname) {
     this.tabpanels[tabname].show(e, this.tabpanel);
     YAHOO.util.Dom.addClass(tabname+'_title', 'active_tab');
     YAHOO.util.Event.removeListener(tabname+'_sidebarpopup', "mouseover", this.show_tab);
+    YAHOO.util.Event.addListener('navigation_tab_panel_'+tabname, "click", function (e){YAHOO.util.Event.stopPropagation(e);});
     YAHOO.util.Event.addListener(tabname+'_sidebarpopup', "click", this.hide_tab, tabname, this);
     YAHOO.util.Event.addListener(window, 'resize', this.resize_tab, this, true);
     YAHOO.util.Event.addListener(document.body, "click", this.hide_tab, tabname, this);
diff --git a/lib/navigationlib.php b/lib/navigationlib.php
index c165446040b..fc38ec42add 100644
--- a/lib/navigationlib.php
+++ b/lib/navigationlib.php
@@ -586,6 +586,20 @@ class navigation_node {
         }
     }
 
+    /**
+     * Returns the child marked as active if there is one, false otherwise.
+     *
+     * @return navigation_node|bool The active node or false
+     */
+    public function get_active_node() {
+        foreach ($this->children as $child) {
+            if ($child->isactive) {
+                return $child;
+            }
+        }
+        return false;
+    }
+
     /**
      * Mark this node as active
      *
@@ -1839,21 +1853,22 @@ class navbar extends navigation_node {
         $output = get_accesshide(get_string('youarehere','access'), 'h2')."<ul>\n";
         
         $firstnode = true;
+        $customchildren = (count($this->children) > 0);
         // Check if navigation contains the active node
         if ($this->page->navigation->contains_active_node()) {
             // Parse the navigation tree to get the active node
-            $output .= $this->parse_branch_to_html($this->page->navigation->children);
+            $output .= $this->parse_branch_to_html($this->page->navigation->children, $firstnode, $customchildren);
             $firstnode = false;
         } else if ($this->page->settingsnav->contains_active_node()) {
             // Parse the settings navigation to get the active node
-            $output .= $this->parse_branch_to_html($this->page->settingsnav->children);
+            $output .= $this->parse_branch_to_html($this->page->settingsnav->children, $firstnode, $customchildren);
             $firstnode = false;
         }
 
         // Check if there are any children added by code
-        if (count($this->children)>0) {
+        if ($customchildren) {
             // Add the custom children
-            $output .= $this->parse_branch_to_html($this->children,$firstnode);
+            $output .= $this->parse_branch_to_html($this->children,$firstnode, false);
         }
         $output .= "</ul>\n";
         $this->content = $output;
@@ -1866,7 +1881,7 @@ class navbar extends navigation_node {
      * @param bool $firstnode
      * @return string HTML
      */
-    protected function parse_branch_to_html($navarray, $firstnode=true) {
+    protected function parse_branch_to_html($navarray, $firstnode=true, $moreafterthis) {
         $separator = get_separator();
         $output = '';
         if ($firstnode===true) {
@@ -1881,6 +1896,7 @@ class navbar extends navigation_node {
             // on the navbar. If we get to 20 items just stop!
             $count++;
             if ($count>20) {
+                // Maximum number of nodes in the navigation branch
                 return $output;
             }
             $child = false;
@@ -1900,8 +1916,17 @@ class navbar extends navigation_node {
                 // We found an/the active node, set navarray to it's children so that
                 // we come back through this while with the children of the active node
                 $navarray = $child->children;
+                // If there are not more arrays being processed after this AND this is the last element
+                // then we want to set the action to null so that it is not used
+                if (!$moreafterthis && (!$child->contains_active_node() || ($child->find_active_node()==false || $child->find_active_node()->mainnavonly))) {
+                    $oldaction = $child->action;
+                    $child->action = null;
+                }
                 // Now display the node
                 $output .= '<li>'.$separator.' '.$child->content(true).'</li>';
+                if (isset($oldaction)) {
+                    $child->action = $oldaction;
+                }
             }
         }
         // XHTML
diff --git a/theme/standard/styles_layout.css b/theme/standard/styles_layout.css
index 41c15a2d3c8..4ea1795873f 100644
--- a/theme/standard/styles_layout.css
+++ b/theme/standard/styles_layout.css
@@ -1792,7 +1792,13 @@ a.skip:focus, a.skip:active {
  padding:3px;
 }
 
-/* Navigation and settings block */
+/**
+ * Navigation and settings block
+ **/
+.customcommand img {
+    margin-left:2px;
+    margin-right:2px;
+}
 .sideblock .block_tree_box {
     margin:2px;
 }
@@ -1888,7 +1894,7 @@ body.has_navigation_bar {
   padding:0px;
 }
 .ie6 .navigation_bar li p {
-  background-color:inherit;
+    background-color:inherit;
 }
 .navigation_bar .sideblock_tab {
   
@@ -1902,8 +1908,6 @@ body.has_navigation_bar {
   cursor:pointer;
 }
 .navigation_bar .bd.oversized_content {
-  background-color:red;
-  margin:3px;
   overflow-y:auto;
   overflow-x:visible;
   height:inherit;