Hi Kalpesh
Quick suggestion without going into much details - try "bitbake image-full-galileo -c nconfig" instead. Nconfig is pretty much the same as menuconfig but uses ncurses instead and that was the only way I made it work on my openSUSE 12.3 build host. As I've found out trying to troubleshoot the same error - some distros have headers that conflict with the ones you have in Yocto and that causes such effect during cross compilation + another reason may be the specific terminal emulation program you're using.
Just search for "bitbake menuconfig error" + the error message you get and you'll see quite a few such complaints. Usually they recommend trying various env variables for compensating for the terminal emulator and if that's the headers thing (like on openSUSE) - only nconfig helps.
Or you can try Ubuntu 12.04 instead of 13.04 - that warning about unsupported distro at the beginning of the log file is meaningful, some things are indeed not working on non-verified distros and it may be the case that on 12.04 it will just work.