l() is not being called correctly in menu.inc
According to my experience, this happens when the third argument passes to l() is not an array and you are using PHP 5.3. See http://api.drupal.org/api/drupal/includes%21common.inc/function/l/6 as to how the third parameter $options is being used. 

Then it is time dwelve into what is causing your $parent['localized_options'] not to be an array.