Any code snippets that give a nicer categories tree?

I was just wondering if anyone had a code snipped that could give me a nicer category tree. I have the “ships ahoy” template and i am really happy with it, I customized it to make it look nice, and now I am having issues with how the categories tree looks.

Its bad. I mean, the layout does not make sense. When you create a subcatgory, instead of showing it as indented under the main category, it makes a HUGE space between parent and child, and it does not LOOK like a sub category at all!

Now, i am somewhat familiar with changing php code and adding in dynamic menus, but I am new to wordpress so i would like a push int he right direction..

You can see my blog HERE
There you will see that there is a category OSCOMMERCE and then under there is DESIGN AND LOOKS and HOW-TO and they look out of place. THose are SUPPOSED to the subccategories to the parent category OSCOMMERCE.

I just want to make it look nicer with an indent or something.. OR i would be REALLY happy with a dynamic dropdown/fly out of some sort.