I'd also be interested in something like this. Anyone got any idea on what this would involve?
Would you have to go in and actually do the html code for links that jump the page and <a href=""> codes to the category pages, making sure to update your list every time you wanted to add a new category?
If this is the only way to do it, that would kinda stink.

Honestly, it would seem there should be some way to get the code to recognize the category names by alphabetical order and sort them as such into groups.
But then again, maybe I"m just use to expecting a lot out of x-cart. *smirk* It is a spiffy store program.