Category based Menu Bar – Please Help!

Hi There,

I am using wordpress more as a website CMS rather than a blog and
I am trying to develop a tabbed, horizontal, 2 layer menu with the top level being parent categories and the second level being the children of what ever parent category you are viewing.

see example at http://survivor-magazine.com

This example is doing the same thing only using pages not categories.

I also need the current sub category and its siblings to be displayed on the second level when a sub category is being displayed.

eg.
Countries (Parent) Selected

                         _________
Level 1 > Cars | Countries | Animals | Some_Cat
             _____                   _______________________
Level 2 > Australia | New Zealand | USA | UK
             ______________________________________
             Some posts which are assigned to the
             ‘Country’ category displayed here.

eg2.
Australia (Child) Selected

                         _________
Level 1 > Cars | Countries | Animals | Some_Cat
             _____                   _______________________
Level 2 > Australia | New Zealand | USA | UK
             ______________________________________
             Some posts which are assigned to the
             ‘Australia’ subcategory displayed here.

I have wrestled with this for a long time and I am now tearing my hair out.

Could someone please help!