Don't overlook site navigation
The site navigation is very important and should not be overlooked. It's best, when a fair amount of time is spent on it, testing it with at least five different users.
Sometimes small problems in the navigation may result in increased bounce rate, making the user experience worse. They are hard to discover and remove. Meanwhile the user may just leave the site to look at another place for similar information. He might then never come back again.
Multi-level drop-down menus
Generally, drop-down menus can cover large parts of a page and make them invisible, so they should be used sparingly. Multi-level drop-down menus are hard to use and require more time for the users to adjust. If possible, stick to two levels while trying to keep the number of items in each level to no more than eight.
Simple links, divided through a character (for example pipe)
They are widespread and considered to be simple and easy to use. However, I think that it's unnecessary to add additional characters for layout purposes. Pipes divide the links crearly, but they add additional complexity to the page. Therefore looking on a particular link is harder, considering the noise around it. I would rather recommend to let some breathing space between the links to separate them.
I don't think Flash is good for navigation. To me navigation means functionality and not interactive experiments. It should be clear and accessible from as many as possible devices. Flash is clumsy, needs time to load, requires a preinstalled plugin and isn't as accessible as normal content to web spiders.
Flash for navigation
Use effects very sparingly. At best omit these. There is nothing more disturbing then an animation every time the user hovers on a link. Or an animated tutor telling you what to do and where to click. The behaviour sould be derivable from the interface, without further explanation.
Navigation and effects
Don't use navigational sounds attached to events, because you'll never know if the user likes them and if so, for how long. Your goal must be to keep people as long as possible on the website. Hearing the same sound over and over again will annoy them quickly, so provide an option to mute all sounds.