I've written a simple plug-in to create 'folding' hierarchical Page menus. Initially only the highest level menus are displayed - clicking on an entry reveals the next level down and so on.
The plug-in is tiny and works by creating an exclude= parameter for wp_list_pages, which means it should be compatible with most themes. I've tested it with WP 1.5.1 and 2.0 RC1. You can find out more at http://jpmcc.blogdns.org/index.php/publications/jp_menu_page_condense/
Hint to to the developers - it would be great if this functionality was built into wp_list_pages, e.g. by setting depth=-1