Fatal error: Call to undefined function _theme_menu_variables()

Need more info, did you upgrade at some stage? This function is only missing from the very latest Adatptivetheme core 7.x-3.x-dev and subthemes never call it, only the base theme, so I think you upgraded and something has gone wrong in that process. Tell me what you did, especially if you used the auto upgrader in Drupal.

I'm seeing this too. The call to the function is originating in the AT Panels Everywhere template.php, so if it's been removed from AT core then atpe should be updated accordingly.

Changing status! If this function has been removed so what should be used instead
Fatal error: Call to undefined function _theme_menu_variables() in /var/local/mods/panels_everywhere/at_panels_everywhere.git/template.php on line 121

git checkout cc9dc2d92c5cce0878630cf69b2265cd580dac74 works against adaptivetheme.git

In 7.x-3.x this became a proper theme function, theme_menubar(), so you call it like this:

  // theme the menu bars
  if (!empty($vars['primary_navigation'])) {
    $vars['primary_navigation'] = theme('menubar', array('menu' => $vars['primary_navigation'], 'type' => 'primary'));
  }
  if (!empty($vars['secondary_navigation'])) {
    $vars['secondary_navigation'] = theme('menubar', array('menu' => $vars['secondary_navigation'], 'type' => 'secondary'));
  }

I will update AT Panels Everywhere shortly. Cheers.

Has this been included in the recently updated -dev? (June 13th)

Yes it was included in the last update.