I think this has potential if the menu were to be always visible when at the top of the page. The mouse-activated part would come in to play only when you scroll down. Plenty of websites have the menu visible at the top of the page only anyways. (e.g. Designer News)
That made me think...this has potential if the menu were always visible, but minimized when you scrolled down the page (e.g., small text links rather than big text + icons). Then, moving the mouse (or scrolling up) would reveal the original menu, giving it a bigger hit area.
What about on touch devices? Just have it shown always? I suppose it's not bad - I'd like to see a live example to interact with.
It's an interesting concept that's worth exploring. That said, I'd never let it see the light of day :)
In reality, it would unusable unless you implemented hairy logic. Having to continuously move your mouse to read a menu or know where to point sounds like a UX disaster.