Just posting this for anybody who needs it...
If you would like to statically display Sub Categories underneath their parent category, you must modify the following file:
"yourInstallationDirectory/controls/navigation/categoryNavigation.ascx"
In Line 2 you will see a control variable "StaticDisplayLevels" - set that to the number of levels you no longer want to appear as drop-down menus.
And if you want to modify the styles for each category level, you must read this post:
http://dashcommerce.org/forums/t/1335.aspx