SOLUTION: Replacing menu link with icon dynamically

The improvement above is a special case for FontAwesome (examples here), which provides the ability to alter icons using yet other icon classes, such as icon rotation (icon-rotate-90, icon-flip-vertical, etc), spinners (icon-spin), size (icon-large, icon-2x, icon-4x, etc), color (icon-muted), and border (icon-border).

But my question is does this work properly for *stacking* icons? Eg:

<li>
<span class="icon-stack">
  <i class="icon-circle icon-stack-base"></i>
  <i class="icon-flag icon-light"></i>
</span>
icon-flag on icon-circle<br>
</li>

Thanks.

I have made a module (sandbox) to wrap the menu item title with html code, so we can add tag font-icon.
See Documentation: http://bit.ly/15FzOKl
Sandbox : https://drupal.org/sandbox/m_roji28/2081231

<?php
function MYAWESOMETHEME_menu_link(array $variables) {

 /**
 * Implements theme_menu_link().
 *
 * This code adds an icon <I> tag for use with icon fonts when a menu item
 * contains a CSS class that starts with "icon-". You may add CSS classes to
 * your menu items through the Drupal admin UI with the menu_attributes contrib
 * module.
 *
 * Originally written by lacliniquemtl.
 * Refactored by jwilson3 > mroji28 > driesdelaey.
 * @see http://drupal.org/node/1689728
 */

  $element = $variables['element'];
  $sub_menu = '';

  // If there is a CSS class on the link that starts with "icon-", create
  // additional HTML markup for the icon, and move that specific classname there.

  // Exclusion List for settings eg http://fontawesome.io/examples/
  $exclusion = array(
    'fa-lg','fa-2x','fa-3x','fa-4x','fa-5x',
    'fa-fw',
    'fa-ul', 'fa-li',
    'fa-border',
    'fa-spin',
    'fa-rotate-90', 'fa-rotate-180','fa-rotate-270','fa-flip-horizontal','fa-flip-vertical',
    'fa-stack', 'fa-stack-1x', 'fa-stack-2x',
    'fa-inverse'
  );


  if (isset($element['#original_link']['options']['attributes']['class'])) {

    foreach ($element['#original_link']['options']['attributes']['class'] as $key => $class) {

      if (substr($class, 0, 3) == 'fa-' && !in_array($class,$exclusion)) {

        // We're injecting custom HTML into the link text, so if the original
        // link text was not set to allow HTML (the usual case for menu items),
        // we MUST do our own filtering of the original text with check_plain(),
        // then specify that the link text has HTML content.

        if (!isset($element['#original_link']['options']['html']) || empty($element['#original_link']['options']['html'])) {
          $element['#title'] = check_plain($element['#title']);
          $element['#localized_options']['html'] = TRUE;
        }

        // Add the default-FontAwesome-prefix so we don't need to add it manually in the menu attributes
        $class = 'fa ' . $class;

        // Create additional HTML markup for the link's icon element and wrap
        // the link text in a SPAN element, to easily turn it on or off via CSS.
        $element['#title'] = '<i class="' . $class . '"></i> <span>' . $element['#title'] . '</span>';

        // Finally, remove the icon class from link options, so it is not printed twice.
        unset($element['#localized_options']['attributes']['class'][$key]);

        // kpr($element); // For debugging.

      }
    }
  }
  // Save our modifications, and call core theme_menu_link().
  $variables['element'] = $element;
  return theme_menu_link($variables);
}
?>

@amsri:

The icon does show before the menu text and firebug shows class .fi-home:before but "i" and "span" tags are not added as expected.

The above suggests that the code snippet is not being run at all. It looks like zurb-foundation has its own pre-existing theme function for theming menu_links (theme_zurb_foundation_menu_link) which means simply adding the code snippet above wont work. You need to add the snippet into the existing theme function.

If you can't figure out how to get this working with your theme, your best bet would be to try to get support on IRC or using a new discussion thread. This really isn't the place to diverge this discussion into theme-building support questions. The code seems to work fine for myself and various others who have continued to use and make improvements.