We were creating a Custom Post Type, and found this plugin. Works great!
Created the Post type for a type of product we offer. The theme we are using does not have a post type for Products.
We wanted to be able to associate a PRODUCT TYPE with each product. Didn't want to have to manually type from tags, so we were looking to add a category.
After much searching, we learned that this plugin already does it.
We just didn't know it was called "Hierarchical". Set to TRUE under Taxonomies, Advanced Options.
Thought posting this here might save someone some time.