How to implement category,subcategory navigation?

Hi

Trying to configure a marketplace for selling products from multiple vendors(with each vendor having their own store and products listed globally) using WPMU+Marketpress. The theme being used is Framemarket

Did a test setup and find that I have most of what I need. However I am trying to figure out a way to setup category-->Subcategory navigation as in top menu bar of this site

http://www.shopbop.com

How do we do this?

Thanks
Anjitha