WordPress: Add a login/logout link to any existing menu location.

login-logout.php

<?php

/**
 * Add login/logout link to naviagation menu
 * Typically this will go in functions.php. 
 */
function add_login_out_item_to_menu( $items, $args ){

	//change the theme_location menu name to match the location in your theme.
	if( is_admin() ||  $args->theme_location != 'primary_navigation' )
		return $items;

	$redirect = ( is_home() ) ? false : get_permalink();
	if( is_user_logged_in( ) )
		$link = '<a href="' . wp_logout_url( home_url() ) . '" title="' .  __( 'Logout' ) .'">' . __( 'Logout' ) . '</a>';
	else  $link = '<a href="' . wp_login_url( $redirect  ) . '" title="' .  __( 'Login' ) .'">' . __( 'Login' ) . '</a>';

	return $items.= '<li id="log-in-out-link" class="menu-item menu-type-link">'. $link . '</li>';
}
add_filter( 'wp_nav_menu_items', 'add_login_out_item_to_menu', 50, 2 );