For starters, I don't exactly know which effect you would like to achieve, but I'll asume it's a menu like in skydrive when you click on files and directories.
There is probably a lot of solutions to this, but I can stick with yours found code. First things first - we need to decode it. You can use some online beutyfiers like this one: http://jsbeautifier.org/
I've copied the code of the file contextmenu_o.js and got this code:
var mouse_x = 0;
var mouse_y = 0;
var mouse_left = false;
var mouse_right = false;
if (document.addEventListener != undefined) document.addEventListener('mousemove', mouseMove, true);
else if (document.layers) document.captureEvents(Event.MOUSEDOWN | Event.MOUSEMOVE | Event.MOUSEUP);
document.onmousemove = mouseMove;
document.oncontextmenu = RightMouseDown;
document.onmousedown = mouseDown;
document.onmouseup = mouseUp;
function mouseMove(a) {
    mouse_x = document.all ? event.clientX + document.body.scrollLeft : document.layers ? a.x + window.pageXOffset : a.clientX + window.pageXOffset;
    mouse_y = document.all ? event.clientY + document.body.scrollTop : document.layers ? a.y + window.pageYOffset : a.clientY + window.pageYOffset
}
function RightMouseDown() {
    mouse_right = true;
    return false
}
function init(a, w) {
    var b = document.createElement("DIV");
    b.id = "contextmenu";
    if (!w) var w = 120;
    b.style.width = w + "px";
    var c = '<div style="position:relative;left:10px;top:-4px;">';
    c += a;
    c += ' <a href="http://lablogic.net/scripts/contextmenu/right-click-menu.php" target="_top" title="javascript contextmenu" alt="Free javascript menu"><font color="#565656" size="-2">Get it...</font></a>';
    c += '</div>';
    b.innerHTML = c;
    b.style.position = "absolute";
    b.style.left = "0px";
    b.style.top = "0px";
    b.style.visibility = "hidden";
    b.style.overflow = "hidden";
    b.style.padding = "4px";
    b.style.backgroundColor = "#ffffff";
    b.style.border = "1px solid #6a6868";
    document.body.appendChild(b);
    delete b
}
function mouseUp(e) {
    if (e.which == 1) document.getElementById("contextmenu").style.visibility = "hidden";
    else if (e.which == 3) mouse_right = false
}
function mouseDown(e) {
    if (e.which == 3) {
        mouse_right = true;
        document.getElementById("contextmenu").style.left = mouse_x + "px";
        document.getElementById("contextmenu").style.top = mouse_y + "px";
        document.getElementById("contextmenu").style.visibility = "visible"
    }
}
This isn't the most universal code out there and we need some changes. I'm making my changes visible here, on jsfiddle, but mainly I just overwrite document with my div of choice which I'm giving event listeners.