Robert, thank you for your advice.
I found that the KDE menu editor (Control Panel) wasn't saving the changes I was making to the menu item. I ended up manually editing the file at: /usr/share/applnk/Applications/LabVIEW.kdelnk. (This is a duplicate of the file at: /usr/local/natinst/LabVIEW-8.0/linux/kde/applnk/Applications/LabVIEW.kdelnk.)
Within the LabVIEW.kdelnk file I change the command line to be simply: Exec=labview. I also changed Terminal=0 -- this was the key to the error I was getting. Now when I ran the KDE menu editor the correct values were loaded and I then simply saved the configuration from the KDE menu editor and everything worked fine from the menu selection.
I first tried changing the permissions on the LabVIEW.kdelnk file, since it was a read-only file, and then tried editing it from the KDE menu editor but it still didn't save the values back to the LabVIEW.kdelnk file.
This is rather a brute force fix. There may be a simpler solution but I don't know what it is.
Kurt