My guess on the reasoning for the "dancing" submenus would be that they are intended to keep long submenus from dropping down below the visible screen. This is thoughtful, but the effect is very disconcerting, especially combined with the javascript fading which is a bit jumpy in your example.
I'm not sure what is the best solution for the situation, but I think it is a universal expectation that flyout menus will have their tops about level with the top of the parent menu item.