This is one of those features that a lot of people love to hate, where you have to wait a few seconds or go to the little chevron on the bottom of the menu to expand it:
It doesn't bug me too much - except when it hides the MRU (most recently used) list in any Office application, which drives me batty. It makes sense on some levels - if you remember the Tools menu in Outlook 97, it was a scary long list of many many options, intimidating to many users. So hiding things that aren't frequently used is one way to help that (of course, another way is just smarter menu usage in general, and Outlook 98 did have a much cleaner look than 97).
If you don't like this feature, you can turn it off:
1. Right click on a toolbar in any office app and choose Customize2. On the Options tab, check “Always show full menus”3. Click Close
This is a global setting, so turning it off in one app turns it off for all Office apps.