active menu item - asp.net mvc3 master page

A custom HTML helper usually does the job fine:

public static MvcHtmlString MenuLink(
    this HtmlHelper htmlHelper, 
    string linkText, 
    string actionName, 
    string controllerName
)
{
    string currentAction = htmlHelper.ViewContext.RouteData.GetRequiredString("action");
    string currentController = htmlHelper.ViewContext.RouteData.GetRequiredString("controller");
    if (actionName == currentAction && controllerName == currentController)
    {
        return htmlHelper.ActionLink(
            linkText,
            actionName,
            controllerName,
            null,
            new {
                @class = "current"
            });
    }
    return htmlHelper.ActionLink(linkText, actionName, controllerName);
}

and in your master page:

<ul>
    <li>@Html.MenuLink("Link 1", "link1", "Home")</li>
    <li>@Html.MenuLink("Link 2", "link2", "Home")</li>
</ul> 

Now all that's left is define the .current CSS class.

Added support for areas:

public static class MenuExtensions
{
    public static MvcHtmlString MenuItem(this HtmlHelper htmlHelper, string text, string action, string controller, string area = null)
    {

        var li = new TagBuilder("li");
        var routeData = htmlHelper.ViewContext.RouteData;

        var currentAction = routeData.GetRequiredString("action");
        var currentController = routeData.GetRequiredString("controller");
        var currentArea = routeData.DataTokens["area"] as string;

        if (string.Equals(currentAction, action, StringComparison.OrdinalIgnoreCase) &&
            string.Equals(currentController, controller, StringComparison.OrdinalIgnoreCase) &&
            string.Equals(currentArea, area, StringComparison.OrdinalIgnoreCase))
        {
            li.AddCssClass("active");
        }
        li.InnerHtml = htmlHelper.ActionLink(text, action, controller, new {area}, null).ToHtmlString();
        return MvcHtmlString.Create(li.ToString());
    }
}