Capitalization of User Interface Buttons

Being an amateur programmer and a bit of a perfectionist, I often find myself wondering about capitalization in user interfaces.

If you look towards the top of this very website, you'll notice the links under the "English Language & Usage" banner are all capitalized. Every word, in fact; not just the first word of every link. However, the ones at the very top of the page ("log out," "chat," etc.) have no capitalization.

What is the correct form?

Furthermore, when describing the buttons in a manual, should they be capitalized as if they were proper nouns? For example:

Navigate to the "First Example" pane and click the arrow next to "Second Example." This will bring up a dialog. Now click "Third Example" to perform the task.

I would go with Stacker's answer. As per the Manual of Style for Technical Publications (MSTP), which is strictly followed by all of Microsoft's manuals, software applications etc., title case uses uppercase for every word in the title except prepositions, conjunctions and articles.

Prepositions that have more than 5 letters such as "During" and "Through" should also be capitalized. Articles that appear in the beginning of a sentence should obviously be capitalized.

Words that appear after colons/semicolons are capitalized as well.

Hyphenated words are capitalized based on consistency. For example, if you start out with "Non-company", you retain the lowercase for 'c' throughout the manual/application. If you start out with "Non-Company", you capitalize the 'C' throughout the manual/application. However, Web 2.0 has broken many of these standards and "log out" has also become acceptable. Ideally it should be "Log out".

Capitalization does not only apply to menu items, it is usualy part of a style guide which describes almost all elements of a user interface. Microsoft Styleguide

Another one for KDE

There is no correct form. If you are used to UNIX and C programming, you might be tempted to make your site look like craigslist.org did in its early days. You can do whatever you like.