[dalmuti]

Here is my categories.tpl file:

{* $Id: categories.tpl,v 1.26 2005/11/17 06:55:37 max Exp $ *}
{capture name=menu}
{if $active_modules.Fancy_Categories ne ""}
{include file="modules/Fancy_Categories/categories.tpl"}
{assign var="fc_cellpadding" value="0"}
{else}
{if $config.General.root_categories eq "Y"}
{foreach from=$categories item=c}
<font class="CategoriesList"><a href="home.php?cat={$c.categoryid}" class="VertMenuItems">{$c.category}</a></font><br />
{foreach from=$allcategories item=cat}
{if $cat.parentid eq $c.categoryid}<font class="CategoriesList"><a href="home.php?cat={$cat.categoryid}" class="VertMenuItems">{$cat.category}</a>
</font>
<br />
{/if}
{/foreach}
{/foreach}
{else} {foreach from=$subcategories item=c key=catid}
<font class="CategoriesList"><a href="home.php?cat={$catid}" class="VertMenuItems">{$c.category}</a></font><br />
{/foreach}
{/if}
{/if}

The text in bold will correct both issues for you.

Thanks,

Louise