Just a quick post here. If you get this problem when right-clicking on Flash videos and sometimes in application-like web interfaces, the solution follows. It’s easy too.

So solution to prevent this overlapping of menus:

 

Go to Tools → Options → Content → Click on Advanced button (opposite Javascript) → Check “Disable or Replace Context Menus” checkbox.

That’s it. Problem solved. This was tested on the new Youtube and a few other sites. The solution worked fine. Let me know if it works for you.

(source)