This addon provides a Categories box styled with the jQuery Superfish plugin. Top-level categories are listed in the left or right column, and subcategories pop out to the side and down from each category. There is no limit to the number of subcategories or to the number of category levels. See a screenshot for an idea of what it looks like.
The support thread is at: http://forums.oscommerce.com/topic/393600-addon-superfish-categories-box/