Help Wanted With Truncating Massive Category List

Hi, I have a couple questions. This morning I got the bright idea to launch a shopping blog on a subdomain of my main blog. The theme I’m using won’t look very good with huge lists of categories, (which my shopping blog will have) so I’m wondering if there’s a way to make drop down lists with the main category that when clicked will show the categories that are off of that one. For example Drop down list says: Apparel You click and see Tees, Skirts, etc. Then I’d have three drop down lists as opposed to a humungous list listing all of the parent categories PLUS what’s off of it. Alternatively, if there is no easy way to do that, (and yes, the key word is easy!) is there a way to hide the subcategories until the parent is clicked on?

As well, my other question has been covered here before but I can’t seem to find the thread. (Sorry!) A guy posted asking whether or not it was possible to make a category and then have all the posts from that category show up in a page as opposed to with the main blog. I know there was a way to do it and I really wish I could find the original post. If someone does stumble on the original post, I’m not asking for it to be re-explained, the link would be sufficient.

Thanks!

PS: You can view my new blog here! If you click navigation at the top of the page I’m sure you’ll agree it wouldn’t be sensible to have the long list!