There's a lot of stuff to filter through just in this top menu, and I'd argue a lot of it has names that'll confuse the hell out of folks. So I vote that this be bunched up into larger individual menus with multiple subsections - a bit like, say, a Quake 3-era game's settings menu:
Perhaps not in exact arrangement, but in spirit: there are only 5 "main" option menus (4 if you don't count the "defaults" button, which could be where we find all those nice preset options that were being discussed elsewhere), and each has a number of sub-options. Under Game Options, there's Performance and View - maybe I wouldn't do it quite like this (Performance settings need to go alongside video options, honestly).
But beyond this tabs-and-subtabs thing, let's get some solid ideas out:
- I'd move Player Setup, Gameplay Options, and Compatibility Options into a GAMEPLAY sub-menu, since many of these directly affect game behavior.
- Put Customize Controls, Mouse Options, and Joystick Options into a CONTROLS sub-menu. I'd probably rename Joystick Options to something a bit more inclusive, like Controller Options. Some options from Miscellaneous should go in here too, like the setting that dictates whether left/right ctrl/alt/shift keys are recognized separately or as the same key.
- Display Options is going to go both ways, I think; pull in the HUD and Automap Options in there, but move all the stuff that ISN'T personal-preference and has an effect on performance/video card behavior into a new Video Options menu, along with Set Video Mode and Change Rendering Output. Actually, I think Set Video Mode could use a major overhaul anyway since it's gotten a lot more confusing and overstuffed since the addition of the aspect ratio settings. tl;dr - actual renderer settings like texture filtering, dynamic lights, and screen resolution should go in Video; personal-preference stuff like HUD, crosshair, and view bobbing should go in Display.
- I sort of wonder if Network and Sound Options should go alongside the renderer/resolution settings into a System Options menu. Calling it something like "System" better informs the average user that they're tweaking settings under the hood.
- "Reset to Defaults"/"Last Saved" should be a submenu - this should account for where to place all those presets, in particular an option to save your settings to a new preset.