Hi,
My sub-categories do not display if their parent category is hided. I have 3 sub-categories with posts and a parent category with no posts. The entire hierarchy (both parent and childs) are hided if the parent category has no posts. However, the entire hierarchy is displayed correctly in a wordpress.com blog, even if the parent category is empty.
I am using wordpress 2.0.5 with sidebar widget and the almost-spring theme.