After the original installation of 10.1beta9, my system had a working menu.lst. However, the YaST2 Boot Loader configuration tool corrupted menu.lst by copying lines from the header into the modified sections. In particular, the lines:
   color white/blue black/light-gray
   default 0
   timeout 8
   gfxmenu (hd1,2)/boot/message
were copied from the header into the specific boot sections.

The orignal working menu.lst contained these lines:

# Modified by YaST2. Last modification on Sun Apr  9 21:09:59 UTC 2006

color white/blue black/light-gray
default 0
timeout 8
gfxmenu (hd1,2)/boot/message

###Don't change this comment - YaST2 identifier: Original name: linux###
title SUSE LINUX 10.1
    root (hd1,2)
    kernel /boot/vmlinuz root=/dev/sdb3 vga=0x317 selinux=0    resume=/dev/sdb1  splash=silent showopts
    initrd /boot/initrd

###Don't change this comment - YaST2 identifier: Original name: SUSE LINUX 9.2 (/dev/sda6)###
title SUSE LINUX 9.2 (/dev/sda6)
    root (hd0,5)
    kernel /boot/vmlinuz root=/dev/sda6 vga=0x317 selinux=0 splash=silent console=tty0 resume=/dev/sda5 desktop elevator=as showopts
    initrd /boot/initrd

###Don't change this comment - YaST2 identifier: Original name: SUSE LINUX 10.0 (/dev/sdb2)###
title SUSE LINUX 10.0 (/dev/sdb2)
    root (hd1,1)
    kernel /boot/vmlinuz root=/dev/sdb2 vga=0x317 selinux=0    resume=/dev/sdb1  splash=silent showopts
    initrd /boot/initrd

###Don't change this comment - YaST2 identifier: Original name: windows 1###
title windows 1
    chainloader (hd0,0)+1

###Don't change this comment - YaST2 identifier: Original name: windows 2###
title windows 2
    chainloader (hd0,1)+1

###Don't change this comment - YaST2 identifier: Original name: floppy###
title Floppy
    chainloader (fd0)+1

###Don't change this comment - YaST2 identifier: Original name: failsafe###
title Failsafe -- SUSE LINUX 10.1
    root (hd1,2)
    kernel /boot/vmlinuz root=/dev/sdb3 vga=normal showopts ide=nodma apm=off acpi=off noresume selinux=0 edd=off 3
    initrd /boot/initrd

I then used YaST2 Boot Loader to reorder the sections; in particular, I used the down button to move the first section down into third place. When I did this, the color, default, timeout, and gfxmenu lines were copied into the moved section:

###Don't change this comment - YaST2 identifier: Original name: linux###
title SUSE LINUX 10.1
    root (hd1,2)
    color white/blue black/light-gray
    default 2
    timeout 8
    gfxmenu (hd1,2)/boot/message
    kernel /boot/vmlinuz root=/dev/sdb3 vga=0x317 selinux=0    resume=/dev/sdb1  splash=silent showopts
    initrd /boot/initrd

After fixing menu.lst by removing the extraneous lines, I then tried to use YaST2 Boot Loader to change the default option from the third section (10.1) to the new first section (9.2). That also corrupted menu.lst. This time the color, default, timeout, and gfxmenu lines were copied to the first section and the "Don't change this comment" line was deleted from the first section of menu.lst:

title SUSE LINUX 9.2 (/dev/sda6)
    root (hd0,5)
    color white/blue black/light-gray
    default 0
    timeout 8
    gfxmenu (hd1,2)/boot/message
    kernel /boot/vmlinuz root=/dev/sda6 vga=0x317 selinux=0 splash=silent console=tty0 resume=/dev/sda5 desktop elevator=as showopts
    initrd /boot/initrd

Once again I fixed menu.lst. Then I rearranged the Windows 1 and Windows 2 entries and renamed them. And again, the first section in menu.lst had extra lines copied in and the first line deleted - just as when I changed the default.