This contribution is an alternate category box which will output your store's categories as a proper nested unordered list, instead of a collection of non-breaking spaces, quasi-bullets and break tags.
What's the big deal about that you ask? With the categories now output as an unordered list, you can now more easily apply a lot of nifty CSS to turn your category list into a horizontal drop-down or vertical fly-out menu, make it a collapsible menu, easily attach bullets, add cool mouseover effects, or just about anything you can dream up!
Output includes optional CSS class tags to mark categories as selected or as parent cats. You can also choose to render all of your categories (useful for dynamic menus) or to render only the root cats and the selected category tree. Note that this contribution merely provides a foundation for you to construct a more attractive/functional menu by providing a more semantically-correct output. A little CSS-magic is required on your end, though I have included a sample vertical flyout menu CSS. I have included some resources in the readme.