No, you can specify different path to first eMMC partition. Maemo using /home/user/MyDocs, but you can mount it to other path... now u-boot-update-bootmenu will work if you change it (by specifing path param).
ITEM_DEVICE will tell u-boot-update-bootmenu where to find kernel and initfs images. bootmenu.img.d must be always on first emmc partition.
ITEM_INITRD tells u-boot what initrd file to use when booting.