I have finally made my menu in ReelDVD. Arky was right, you can have all the buttons in one layer, instead of one layer per button, as suggested in some tutorials.
I imported a 2-layered *.PSD (bkg + button overlays) as a "still menu with a subpicture stream", and I could see an "sp track" and a "button track" created in the track editor. Then I imported other assets with no problem. However, when I tried to preview the contents, a message was generated for each asset - "the file xxxx has fewer subpicture streams than the file yyyy" (my menu). Preview was proceeding normally, both video and audio was ok, all buttons worked.
I then selected all the m2v files one by one and clicked on the subpicture button in the Preview Design mode, thus creating sp track and a button track for each.
After that there were no more messages that this or that particular track has fewer subpicture streams.
So do I have to create dummy sp tracks?
Thx: walter
Thanks to Makntraks who replied to my post in another section. I did not want to bump that post with no new content.