Menu Manager
The Menu Manager is a module that reads your page hierarchy and builds a navigation using a 'Menu Manager Template'. By default a few sample menu manager templates are included with your default installation. For most users these are enough, as a menu basically is just an unordered list that is styled with CSS.
The Menu Manager module also accepts various optional attributes (parameters) in the {menu} tag to allow you to customize its behavior. You can see the list and explanation of these parameters in the Menu Manager Help which can be found on the right side of the screen when you click on "Layout » Menu Manager" in the administration console.
Customizing templates in the Menu Manager is as simple as clicking the 'Import Template to Database' button, which will then allow you to create a template with a new name, and modify the layout of the template. You can use your new navigation template by specifying the new name in the call to {menu} in your page template. i.e: {menu template='mynewtemplate'}.
Menu Manager in the CMSMS Admin Panel
Read more about how to do this in the Help for the Menu Manager in the CMSMS Admin Panel. It can be found in the Layout menu.