Can someone suggest the best way to have a button with an arrow and dropdown list like in visual studio toolbar button new item. As you can find in VS the mouse hover is highlig
It looks like you have three problems to solve:
Here are a couple of examples:
I am sure there are many other ways (e.g. using a plain button and ComboBox styled appropriately)
Experiment with triggers; e.g:
Try the MVVM approach: The button element will be bound to a property on your ViewModel. Each menu item will call an action (ICommand) in your ViewModel. This ViewModel will know which menu item was called, and update the button's property on the ViewModel. The button will automatically update using data binding.