I wouldn't say this is material design, but it's interesting. I will say though that basic alignment and padding issues bring it down significantly, and it would look millions of times better if those were fixed. E.g. the icons in the first column, and the "Index Page", and the text in the menu block at the top should all align. Horizontal padding should match the vertical padding optically too. Also there should be no gaps between the forums in each section, only gaps between the sections, look at Googles Inbox and how it groups threads into collections
Notice the Yesterday title forms a line on the left with all the icons and titles underneath it, it's the difference between a clean UI and one that has rough edges, and forces good consistent rules to implement.
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re: the bigger nav header, that's not the concept behind the design, and simply increasing the padding sounds like an aesthetic kludge rather than a design decision. The nav bar design I proposed is thin for a reason, not on a whim, and part of that design involves a homepage nav bar that would be bigger and bolder in a way I'm sure you'd approve of. However people I've spoken to like the navbar design and are moving to kill the existing header as it's an improvement, which it is, and I look forward to future iterations :)
Put simply, the nav bar when inside phpbb/mediawiki/etc is meant to get out of the way and be minimal, low maintenance, simple, and let the content underneath do its job. A big nav bar takes attention, and gets in the way. On the homepage this isn't necessarily a bad idea, but when we take a larger version of the navbar and apply it to something like Mantis, the design starts to buckle and strain, and it looks terrible.
We could design an awesome looking navbar, with bells and whistles. I like to think that's what was in mind when the current header was created. Showcasing awesome content in the header, how could it be bad? Then we had the overlapping bits with Arghs plane, followed by the StarWars units legs creeping into the menu. But it gets in the way. We're not here to look at the menu, we're here to browse the forums, read the wiki, etc A big fancy header doesn't add anything to this site worth having, wether it's a complicated artistic header, or simply a large one.
Instead we need to whittle down to what's absolutely necessary. Right now it bothers me that we have wiki, development and help in there, when the latter 2 were meant to replace the first. Perhaps there should be "development" and "help", which link to different parts of 1 page called wiki rather than 2 separate pages? I'm sure there's an answer. Report a bug could go under Help or Development too, and the new navbar removes the home link in favor of the logo