Steps to reproduce:
1. Add a RadMenu to a form
2. Set up the form to be an MDI parent
3. Add a menu item and set its MdiList property to true
4. Add several mdi children and run the project

You will see that the menu drop down will have scroll bar(s)

Workaround the issue by setting the MinSize property of the last item in the items in the drop down:

  radMenuItem1.Items[radMenuItem1.Items.Count - 1].MinSize = new System.Drawing.Size(0, radMenuItem1.Items[radMenuItem1.Items.Count - 1].Size.Height + 1);