Parent / Child formatting in a list of post of a custom post type

I’m guessing the part you want to change is the actual content output area (not the nav). If so, you could do this:

<?php       
$args = array(
    'post_type' => 'manual', 
    'posts_per_page'=>'-1', 
    'orderby'=>'menu_order', 
    'order'=>'asc'
  );
$loop = new WP_Query( $args );

while ( $loop->have_posts() ) : $loop->the_post();

  $class="parent";
  $header="h1";
  if ($loop->post->post_parent !== 0) {
    $class="child";
    $header="h2";
  } 

  echo '<' . $header . ' class="' . $class . '" id="' . $loop->post->ID . '">' . get_the_title() . '</' . $header . '>';
?>