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Locally integrated menus are displayed in the window decorations for unmaximized windows, instead of the default Unity approach which is to display the menu on the top panel. There is one thing that the default Unity menu and LIM have in common: both are displayed on mouse over and there's no option to make the menu permanently visible, at least not yet.

As for maximized windows, the menu continues to be displayed on the top panel when using LIM.

This type of menu was first announced at the beginning of 2012 and was supposed to be added to Ubuntu 12.04 but it was subsequently delayed until now, when this feature finally landed in Ubuntu 14.04 Trusty Tahr, though it's a bit different: instead of a menu button, the menus are displayed directly in the titlebar.

However, according to Marco Trevisan (the developer behind this feature), LIM might become default for Ubuntu 14.04, depending on community feedback:

Some LIM-related settings such as the click movement threshold or the double click wait are not available in System Settings but can be found in Dconf-editor, under com > canonical > unity > integrated-menus.

Besides LIM, another important set of changes landed in Unity, for HiDPI support. Since I can't test this (I don't have a HiDPI monitor), I'm not sure how well HiDPI is currently supported in Unity and if more changes are required for a proper HighDPI experience.

This update should be available to all Ubuntu 14.04 users in a few minutes.

Update: With just 3 days before the Ubuntu 15.04 release, Unity was updated with only one change: the default out of the box menu was set back to global menu.

After getting an option to always show the menus as well as global menu (Appmenu) support for Java Swing applications, yet another menu-related change has landed in Ubuntu 15.04 Vivid Vervet: locally integrated menu (LIM) is now the default menu.

Locally integrated menus are displayed in the window's titlebar for unmaximized windows, instead of the previous default Unity approach, which was to always display the menu on the top panel. LIM was introduced with Ubuntu 14.04 as an alternative to Unity's Appmenu (global menu), but it's not used by default in either Ubuntu 14.04 or 14.10.

Even though the Unity changelog doesn't mention this change, LIM being set as default in Ubuntu 15.04 Vivid Vervet is confirmed by Marco Marco Trevisan's "lim-everywhere" Unity branch that was merged into Unity yesterday (check out the merge request description HERE). This update has already landed in Vivid so if you install the latest Unity update, LIM should be used by default.

To accompany this change, Marco has tweaked locally integrated menus (which use autohide by default) to allow accessing the menus of unfocused windows as well, a feature that wasn't available until now:

Thanks to this tweak, you can directly open the menu of an unfocused window by clicking on it. If you don't like this behavior, you can disable it via Dconf Editor: com > canonical > unity > integrated-menus > unfocused-windows-popup.

For now, LIM continues to use autohide and there's no option in the System Settings to enable the recently introduced "always show menus" option so if you want to enable that option, you'll have to use Dconf Editor (com > canonical > unity and enable "always-show-menus").

If you prefer the old default global menu (Appmenu), you can easily switch back to it, by going to System Settings > Appearance and on the Behavior tab, under "Show the menus for a window", enable "In the menu bar".

Unity developer +Marco Trevisan is working on some tweaks for Ubuntu 15.04 Vivid Vervet and among them, there's a fix for a three year old bug related to Unity's menus. 

Marco's work involves adding an option to always show the Unity menus (in Unity, the menus are currently displayed on mouseover). Furthermore, this option will work with both the regular Appmenu / global menu, displayed on the top Unity panel, as well as LIM (locally integrated menus), displayed in the application titlebar:

In the current implementation, the option to always show the menu is available via Dconf-Editor (com > canonical > unity > always-show-menus) and I don't know if it will be integrated in System Settings, but I'm sure that applications like Unity Tweak Tool will get an option to make this easier to access and configure.

The option to make the Unity menus always visible didn't land in Ubuntu 15.04 Vivid Vervet yet (I installed Unity from Marco's branch for the screenshot above), but Marco's branch was proposed for merging, and it will probably make it into Vivid soon.