I've always have my doubts about navigation menus effect on SEO. You know, the vertical menus on the top that show in every page in the site linking to main sections and subsections.

My issue is that if not done dynamically (i.e. after page is loaded or something), from a search engine's point of view it probably looks like a whole bunch of links in the beginning of the page, and links that probably have nothing to do with the page being analyzed, so it's probably not only confusing it, but also giving link 'juice' to the wrong pages or reducing its value.

When I've asked SEO people about this, I usually get a "Google is smart, they'll recognize it as a menu and ignore it" response, but I'm not convinced (and the 'Google is smart' argument sounds almost like religion discussion to me).

So does it affect SEO negatively or not? Are there any official posts on this topic?