More or less we do set our windowToolStripItem for this. Now, if all the MdiChilren are closed, why is it that there's a separator on the sub item of out window ToolStripItem? Is there any other property I should set for this? Something I missed or bug?
That would appear to be a bit of a bug. You could work around that by only having the MdiWindowListItem set if there is at least one child showing. I wrote the code in VB by accident but you should be able to get the idea and implement it yourself in C#.
vb Code:
Private Sub ToolStripButton1_Click(ByVal sender As System.Object, ByVal e As System.EventArgs) Handles ToolStripButton1.Click