I along with many others use WordPress as a general CMS.
I've used WordPress for many sites including a free recipe site http://www.free-recipes.co.uk/ which has over 60,000 posts (working on 100,000) over 300 odd categories.
This means using the default WordPress coding I have to have 300+ categories links on every page!! I found a plugin called folding categories which gave me exactly what I wanted, a way to limit the number of cats shown per page:
Level one categories (in my case Recipes A, Recipes B.... Recipes Z) shown on every page and level 2 categories only shown when under level 1 categories: so in my case someone on Recipes A cat would see Apple Recipes, Avocado Recipes, African Recipes etc.... but not Cheese Recipes, Dog Recipes etc...
This way the number of categories listed on any one page was no more than about 50.
Unfortunately there appears to be a coding problem with this plugin, when activated my queries increase from about 60 queries to over 600 queries and the pages load really slow (so something is wrong, really should load faster). Tested this on two installations with the same results, which is a real shame as it was perfect.
I would like to see this folding category behaviour made standard in WordPress, closest I've seen is the ability to only show one level, but this means all deeper cats are never show on the menu and so visitors and search engines can't follow them.