The logic of linking one menu (or more) to a regular html file is the same as with other type of files like "Includes", Dreamweaver templates, of Dynamic Web Templates in Frontpage.
To change a menu (either in the first-level template or the nested templates)
1. Change it (add/delete items or whatever)
2. Recompile
3. Put the .js out to the server and it's done!
To create new sub web child pages:
1. Create > New .htm from the nested template
2. The menu is there automatically without recompile