You can see the mod at work here:
http://rodengray.com/shop/Men.html
What you're describing is a filter, the ability to select a category, then filter the results by brand (only showing one brand at a time). This mod shows all the results, but groups them by the name of the manufacturer alphabetically.
There is a mod that sort of does the opposite of what you describe available for free here:
http://www.bcsengineering.com/store/free-manufacturer-categories-mod.html?&MMCF_xfManuCat
It filters manufacturers by category instead of category by manufacturer.
There's also the Power Filter module, which works on categories only:
http://www.xcartmod.com/cart/product/power-filter.html