Text, images and image links can be used to create your own navigation either as supplement to the Office Live one or to replace it entirely. Replacing it is useful if you would like your navigation in a different place. If you have a lot of pages it is less time consuming to use the OL navigation menu.
If you want to replace the OL navigation entirely it is easy to remove it. Go to Page Properties for each page. At the bottom of the dialog box it will say 'Include:' uncheck the box for Navigation. If you change your mind you can put it back again by rechecking the box. (you need to have the Advanced Design Features activated to do this. You can activate them in the Page Manager > Site Actions).
Remember that your navigation is how your visitors are going to find their way around your site. Keep it consistent and easy to understand. Make sure they can find their way to and back from everywhere.

New!
With the February 2009 updates, we can now change the Navigation menu's color in Office Live (you can change the header, body and footer colors too!). Click on the color icon in Site Designer and then click on Custom Color Scheme at the bottom. You will get the box on the bottom left. Click on Navigation and you can select colors for the Button, Button Pressed, Text and Text Pressed. If you want colors other then those in the OL pallete, click on More Colors and you can either play around with the color chooser or type in the hex number for the color of your choice.
tip
You can use the Custom Navigation module if you would like the functionality of the Office Live navigation but would like to put it in a different place on your pages. The module will display the left navigation menu and can be put anywhere on a page. You will be able to place content above and below it, just like anything else on your page. Any color changes or CSS code used to change the OL navigation will also apply to the Custom navigation module. My right hand menu uses the Custom Navigation module with some additional css to change it's appearance.
text links
My top navigation is simply text and hyperlinks. Saving the page as a template makes it easier, the template will inlcude any links and content of the page. For text with something fancier than the basic fonts, an image of the word can be used instead and will be seen correctly regardless of what fonts your viewer has in their computer.
images as links
Any image can be easily turned into a link by clicking on the image and clicking hyperlink in the Page Editor. You can get creative with images to supplement your navigation. Use images of your products or you can use a graphic.
If you are comfortable using CSS code, you can remove the blue border around image links, change them to another color and also change the color and behavior of text links.