Index: modules/menu/menu.admin.inc
===================================================================
RCS file: /cvs/drupal/drupal/modules/menu/menu.admin.inc,v
retrieving revision 1.90
diff -u -p -r1.90 menu.admin.inc
--- modules/menu/menu.admin.inc	20 Oct 2010 07:40:59 -0000	1.90
+++ modules/menu/menu.admin.inc	16 Dec 2010 05:29:23 -0000
@@ -328,7 +328,7 @@ function menu_edit_item($form, &$form_st
 
   // Generate a list of possible parents (not including this link or descendants).
   $options = menu_parent_options(menu_get_menus(), $item);
-  $default = $item['menu_name'] . ':' . $item['plid'];
+  $default = ($link['mlid'] ? $item['menu_name'] . ':' . $item['plid'] : 'main-menu:0');
   if (!isset($options[$default])) {
     $default = 'navigation:0';
   }
Index: modules/menu/menu.install
===================================================================
RCS file: /cvs/drupal/drupal/modules/menu/menu.install,v
retrieving revision 1.26
diff -u -p -r1.26 menu.install
--- modules/menu/menu.install	23 Aug 2010 23:38:06 -0000	1.26
+++ modules/menu/menu.install	16 Dec 2010 05:29:23 -0000
@@ -70,3 +70,22 @@ function menu_uninstall() {
   menu_rebuild();
 }
 
+/**
+ * Upgrade path for finer node menu controls (http://drupal.org/node/351249)
+ */
+function menu_update_7000() {
+  // Retain Drupal 6 menu setting for node parents or set all menus if such
+  // setting was not found (such as a previously running Drupal 7 site).
+  $d6_menu_setting = variable_get('menu_default_node_menu', NULL);
+  $menus = (is_null($d6_menu_setting) ? array_keys(menu_get_menus()) : array($d6_menu_setting));
+
+  // Store the menu setting for each node type.
+  $node_types = node_type_get_types();
+  foreach($node_types as $key => $type) {
+    $type_menus = variable_get('menu_options_' . $key, NULL);
+    // Check with is_null() so we leave empty settings untouched, if present.
+    if (is_null($type_menus)) {
+      variable_set('menu_options_' . $key, $menus);
+    }
+  }
+}
Index: modules/menu/menu.module
===================================================================
RCS file: /cvs/drupal/drupal/modules/menu/menu.module,v
retrieving revision 1.233
diff -u -p -r1.233 menu.module
--- modules/menu/menu.module	24 Sep 2010 00:37:43 -0000	1.233
+++ modules/menu/menu.module	16 Dec 2010 05:29:24 -0000
@@ -648,9 +648,12 @@ function menu_form_node_form_alter(&$for
   );
 
   $default = ($link['mlid'] ? $link['menu_name'] . ':' . $link['plid'] : variable_get('menu_parent_' . $type, 'main-menu:0'));
-  // @todo This will fail with the new selective menus per content type.
+
+  // If the item is in a menu that is not permitted for this content type,
+  // allow it to stay there.
   if (!isset($options[$default])) {
-    $default = 'navigation:0';
+    $all_options = menu_parent_options(menu_get_menus(), $link);
+    $options[$default] = $all_options[$default];
   }
   $form['menu']['link']['parent'] = array(
     '#type' => 'select',