Windows 7 Start menu looks very similar to Windows Vista but its customization is much easier than Vista. In Windows Vista, you need to go through various steps to change Power button action in start menu:
How to Change Power Button in Windows Vista?
But Windows 7 no longer requires to go through so many steps, you can change the power button action from Taskbar settings. This tutorial will help you in customizing the power button in Windows 7.
Before:

After:

Simply follow these simple steps:
1. Right click on Taskbar and select Properties.
2. Go to "Start Menu" tab and select the desired action from drop-down list in "Power button action" section:

3. That's it. Apply the changes and now you'll get the desired button in Start menu.
This article was posted by VG in following section: Troubleshooting, Windows 7.
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Ingnition
Thank you vg, no wonder when i pressed the power button my computer went to sleep
Thank you so much and good luck with your dad
Pardaillan32
Hi VG, thanks for the info. I need some help with something else. I've tried to add My Computer to the Taskbar but it won't ( it only gets Pinned to the Explorer). In your screen right here I see that you've added Computer to the Taskbar. How did you do it, please?
kq
Can I somehow make it ASK me what to do? (just like in windows XP)
VG
^^ Nope.
chris
hello, i need help, i am able to change the setting in the configuration, but the button doesn't actually change, it's stuck on shutdown! please help
VG
^^ Did you try to restart your system? Also are you using any 3rd party theme by any chance?
chris
no, no third party theme, i have restarted, tried editing with gpedit.msc, and other stuff, nothing works, in the setting it says that the power putton is supposed to hibernate, but it says shut down always
VG
^^ Then most probably its a bug.
chris
what can i do to fix it then, run virus scan?
VG
^^ Nothing. Are you using Windows 7 RC version? If its a bug, nothing can be done. You can try a reinstall.