category hierarchy not working

Hi

this is my code in which the hierarchy=1 is not working in wordpress2.7, but the same code is working fine in wordpress2.6,Please help me

My sample code is below

$source_options = get_categories(‘hide_empty=1&hierarchical=1’);
foreach ( (array) $source_options as $option2 )
{
$parent = $option2->category_parent;
$title = $option2->name;
$id = $option2->cat_ID;
if($parent==0)
{
echo $option2->name;
}
else
{
echo $option2->name;
}
}