Just answering my own question so others know what I found.
It is not possible to change the highlight of a standard menu item as the system does some trickery behind the scenes to draw the gradient fill used by the menu item.
Essentially the highlight color is set as normal color, the system then substitutes the "highlight color" with an actual gradient instead of a solid color.
The only real way to do custom highlighting is to create a view based menu and do all the drawing yourself.