Why can't Nice Menus show custom made menu items translated?

Hi,

I have a multilingual site with three languages [English, Finnish (default language) and Swedish]. Now I'm trying to make Nice Menus to show translated menu items which I have made at "Menus" page. I also have some normal node titles in my menu. All titles are translated via locale module. Problem is that all custom menu titles stay Finnish when I change the language - only node titles are translated.

The funny thing is that without Nice Menus everything is working perfectly - all titles are shown perfectly translated in Drupal's original menu system. See attached screenshot taken from my English front page - Nice Menus below and original menu system above.

I have been forced to use code below to translate all custom titles:

function phptemplate_menu_item_link($link) {
  if (empty($link['localized_options'])) {
    $link['localized_options'] = array();
  }

  if(strpos($link['link_title'] , 'Etusivu') !== FALSE) {
    $link['title'] = t('Home');
  }
  
  if(strpos($link['link_title'] , 'Ajankohtaista') !== FALSE) {
    $link['title'] = t('Current news');
  }
  
  return l($link['title'], $link['href'], $link['localized_options']);
}

I'm not sure if I have missed some option, but I suppose Nice Menus should translate those titles?

Here's some specs from my site:
- i18n 6.x-1.0-beta4 installed
- Nice Menus block is set to "All languages"
- All custom menu items are set to "All languages"
- Drupal 6.5
- MySQL database 5.0.22
- PHP 5.1.6