layout - Usability of vertical text

I am playing with ideas for a menu that I want to add to some site designs and was wondering: How usable is vertical text in any portion of a site (specifically menus)?

For example

You can have text like this:

or you can have text like this:

Any input? Is horizontal text always best?

Answer

Your example shows left-to-right languages, and its better to keep the rotation of the letters the same since we see words as shapes rather than reading letter by letter.

That's probably why you see more feedback signs where the word is rotated 90 degrees rather than each letter:

When we read- we read the shape the word gives us, which also answers the question why you should use lower case letter rather than upper case letters in long texts. Humans recognize the shape, which we are taught when we learn the word.

Reference: The Science of Word Recognition

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This knowledge has been true for a very long time until Ph.D. Susan Weinschenk informed the community in her article 100 Things You Should Know About People: #19 — It’s a Myth That All Capital Letters Are Inherently Harder to Read that the shape theory is wrong:

It’s parallel letter recognition, not word shape — The old theory on word shapes comes from a psycholinguist named Cattell who came up with that theory in 1886. There was some evidence for it, but more recent research shows that it is letters you are recognizing and anticipating. You don’t recognize words by the shape of the word. You recognize familiar letter sequences. The research strongly suggests that you recognize all the letters in a word at the same time, and then you use the recognition of those letters to recognize the word.

Still, reading a word as a shape or in parallel, suggest that you should organize letter as you read them - not on top of each other.