[Alltribes]

That won't quite do it balinor. That just shows them in a single column. Try this:

{if $subcategories}
<table cellspacing="5" width="100%" border="0">
<tr>
{foreach from=$subcategories item=subcat}

{if $tmp is div by 4} 
     </tr><tr><td colspan="3"></td></tr><tr valign="top"> 
{/if} 

{ if $tmp and $first_subcat ne "Y" }
    {assign var="tmp" value=1}
    {assign var="first_subcat" value="Y"}
{/if}

 <td class="ColumnTitles" valign="top"><a title="{$subcat.category}" href="home.php?cat={ $subcat.categoryid }"><img src="{if $subcat.icon_url}{$subcat.icon_url}{else}{$xcart_web_dir}/default_image.gif{/if}" alt="" />

    <br /><font class="ItemsList">{ $subcat.category|escape }</font></a>

    {if $config.Appearance.count_products eq "Y"}
{if $subcat.product_count}{ $subcat.product_count } {$lng.lbl_products}
{elseif $subcat.subcategory_count}{ $subcat.subcategory_count } {$lng.lbl_categories|lower}
{else} 0 Products
{/if}
    {/if}
{assign var="tmp" value=$tmp+1}
{/foreach}
</table>
{/if}

Change {if $tmp is div by 4} to whatever number of columns you want.