I figured this out - for future reference if any newbies need help like I did:
Just be clever with some if/else statements ie:
Apply class to current category <a>
{if $current_category.categoryid eq $c.categoryid} class="expand"{/if}
Apply class to current category parent <a>
{if $current_category.parentid eq $c.categoryid} class="expand" {/if}
Sub Category menu items are different --
{if $current_category.categoryid eq $cat.categoryid} class="subactive"{/if}