Have you given it a try yet? This is what's called Foldertree navigation. We think it's really neat, don't you? If you like, you may get the source code (it's called Foldertree 1.3) directly from the author's site. (Note: We do not offer the source code as it a much too complex script to offer Question & Answer support for. And, all questions regarding this script should be directed to its author.)

You should see the example in the left frame of this page.

Get Source code