I just realized that they added some sweet features to the wp_list_pages() funtion in WordPress 2.7. These include the ability to add html before and after menu items.
I was struggling earlier today, trying to squeeze graphic dividers between dynamically-created between menu items. After trying all sorts of CSS tricks, I discovered this simple workaround included in WordPress since 2.7.
The basic code to add an image after each menu item looks like this:
<?php wp_list_pages(‘link_after=<img src=”http://mydomain.com/myImage.gif”‘); ?>
ALSO, as a bonus, I also discovered the brand new (since 2.7) function, wp_page_menu(), which is similar to the aforementioned wp_list_pages function, except that this one is specially-designed to allow us to add the “home” page to the menu. My guess is that the new wp_page_menu() function will eventually replace wp_list_pages().