The Fold Category List plugin to provide collapsable styled category lists has just been updated to v2.0 as a compatibility release for WP2.3+
This release addresses the changes necessary to support WP's new database structure for categories, as well as introducing support for the 'orderby', 'order' and 'title_li' arguments not previously available. Default sorting under WP2.3+ also follows the new defaults, using 'name' sorting instead of 'ID' as previously.
The update (and documentation) is available from the Fold Category List support page.
I am aware that others have stepped in and provided patches and some of the changes here are derived from their efforts (credited) for which I am grateful.
This new version though goes beyond those patches, and also retains compatibility with older versions of WP, all the way back to 1.5