/usr/share/desktop-directories/Test.directory
--------------------------------------------------
[Desktop Entry]
Name=Test
Comment=Test submenu
Icon=gnome-util
Type=Directory
Encoding=UTF-8

~/.e/e/applications/menu/favorite.menu
--------------------------------------------------
<Menu>
  <Name>Favorites</Name>
  <DefaultAppDirs/>
  <DefaultDirectoryDirs/>
  <Menu>
    <Name>Test</Name>
    <Directory>Test.directory</Directory>
    <Include>
      <Filename>gaim.desktop</Filename>
      <Filename>nautilus-home.desktop</Filename>
    </Include>
  </Menu>
  <Include>
    <Filename>gaim.desktop</Filename>
    <Filename>nautilus-home.desktop</Filename>
    <Filename>mozilla-firefox-2.0.desktop</Filename>
    <Filename>mozilla-thunderbird.desktop</Filename>
    <Filename>gedit.desktop</Filename>
    <Filename>rxvt.desktop</Filename>
    <Filename>xchat.desktop</Filename>
    <Filename>gftp.desktop</Filename>
  </Include>
</Menu>