I have a problem in that I am using VLC on a home made 'media centre' using only a remote control for operating VLC.
It seems that, on certain DVD's, VLC will not highlight the current command (E.g. from a list such at: "Play All, Episodes, Extras"). When the DVD's are played in a DVD player the currently selected command is highlighted correctly.
On some DVD's the highlights will appear if one is clicked with a (temporarily attached) mouse and on one the highlights appear simply by moving the mouse pointer over any selectable item (the highlight remains when the mouse cursor is moved away). On yet others the highlights will not appear at all or will only appear on some menus.
I should mention that if the command can be selected 'blind' (i.e. by using the left right keys) and VLC honours the selection but, of course, it's very hit and miss.