Setting an Intro movie for a menu means that whenever you jump to this menu from a movie or from "First play", the intro clip is played first, and the menu appears at the second chapter. If you do not specify a second chapter, the menu appears immediately.
Example:
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An intro movie is an additional playitem at the beginning of the menu playlist.
If the menu and the intro are in one file (with no separate menu loop), specify "0" in "Additional play items" in the "Project properties". In this case no additional playitems are added to the menu playlist and only the intro playitem (without the menu) is used for the intro; you then have to specify a loop point (the 3rd chapter) in the intro.
If you do not specify an intro for a menu at all, a single menu playlist is created. The menu video is repeated in the menu playlist as many times as specified in Project Properties → Menu → Menu playlist → Additional playitems. When the end of the menu playlist is reached, it starts playing from the beginning.
If you specify an intro for a menu (the "Intro Movie" property in the menu properties), two playlists are created:
If you use the "Jump to menu" command (from a movie or from "first play") to go to a menu that has no "Intro Movie" property specified, the first playlist starts playing.
If you use the "Jump to menu" command (from a movie or from "first play") to go to a menu that has the "Intro Movie" property specified, the second playlist starts playing.
A movie specified in the "Intro Movie" property of a menu is added to the menu playlist and cannot be used as a regular movie.
Example (9 additional playitems - 10 in total):

The triangles are chapters. The arrows leaving the end show what happens at the end of the menu playlist. The grey rectangle is the intro video.
In variants 2 and 3, one additional chapter (shown in red) is added between playitems 1 and 2 during compilation.