And to be a little fancier, if you use prependTo to prepend the menu to the userlink div, the hover exit event will fire when you leave either the userlink div OR the menu, meaning it won't blink away when you move the cursor from the userlink div to the menu.
<html>
<head>
<script type="text/javascript" src="http://code.jquery.com/jquery-1.7.1.min.js"></script>
<script type="text/javascript">
$(document).ready(function(){
// cache the menu object for optimum performance
var $menu = $("#menu"), pos, width;
var showMenu = function(){
//get the position of the placeholder element
pos = $(this).offset();
width = $(this).width();
//show the menu directly over the placeholder
$menu.css({ "left": (pos.left + width) + "px", "top":pos.top + "px" }).prependTo("#userlink").show();
}
var hideMenu = function() {
$menu.hide();
}
$("#userlink").hover(showMenu, hideMenu);
});
</script>
</head>
<body>
<div style="position: absolute; display: none;float:left;" id="menu">
<a href="#">Settings</a>
<a href="#">Logout</a>
</div>
<div style="float:left;" id="userlink">John Smith</div>
</body>
</html>