I have been able to do category sensitive search using the following codes in a new .tpl file and then include this file in the customer/subcategories.tpl file. Additional categories can be included in the list...
Code:
<form action="search.php" name="productsearchbyprice_form">
<font color="#000000" size="2">
Search in</font>
<select name="in_category">
{section name=cat_num}
<option value="{ $current_category.categoryid}">{$current_category.category|regex_replace:"/.*\//":""}</option>
{/section}
{if $current_category.categoryid ne 6}
<option value=6>Bargain Center</option>
{/if}
<option value="">All Categories</option>
</select>
<font color="#000000" size="2">
for</font>
<input type="text" name="substring" size="20" value="{$smarty.get.substring}">
{include file="buttons/search.tpl"}
</form>
check
http://www.shopping.com.mv/mall for a demo. Select subcategories and the search category changes.... Hope this is of use to someone... Thanks