Your code is correct, but a bit out of order.  You can't count the child
items until you add them.  Here's an example I used based on your code (but
against the Microsoft Northwind database).  It loops through the categories
(the MasterItems) and adds each product based on category as child menu items,
then adds the count before it adds into the final Menu object.  

Your data logic will be a bit different, but the sequencing of creating the
menu, creating the masterItem, adding the childrenItem(s), then setting the
MasterItem's text should be the same.

NorthwindDataContext db = new NorthwindDataContext();
           
           Menu menu = new Menu();

           foreach (Category c in db.Categories.ToList())
           {
               MenuItem masterItem = new MenuItem();
               masterItem.NavigateUrl = "#";
               
               // Loop through the Products table matching CategoryID to
the product's CategoryID.
               foreach (Product product in db.Products.Where(x => x.CategoryID
== c.CategoryID))
               {
                   MenuItem childrenItem = new MenuItem(product.ProductName);
                   childrenItem.NavigateUrl = "#";
                   masterItem.ChildItems.Add(childrenItem);
               }

               // After the childItems are added, then count them.
               masterItem.Text = string.Format("{0} [{1}]", c.CategoryName,
masterItem.ChildItems.Count.ToString());

               menu.Items.Add(masterItem);
           }

           //form1.Controls.Add(menu);

HTH.

-dl

--
David R. Longnecker
http://blog.tiredstudent.com