I found a nice little
post from Heather Solomon on allowing SharePoint to have multiple levels of sub navigation. It works really well, but the navigation editor in MOSS does not let you nest sub-menus by default. I wrote a quick little C# app that allowed me to add navigation as needed. Here is the meat of the code.
SPNavigationNode oNewNode = new SPNavigationNode("My New Tab3","");
oWeb.Navigation.TopNavigationBar.AddAsLast(oNewNode);
oNewNode.Properties.Add("NodeType","Heading");
oNewNode.Update();
SPNavigationNode oChild1 = new SPNavigationNode("C1","/");
oNewNode.Children.AddAsFirst(oChild1);
oChild1.Properties.Add("NodeType","Heading");
oChild1.Update();
SPNavigationNode oChild2 = new SPNavigationNode("C2","/");
oChild1.Children.AddAsFirst(oChild2);
Note: I have only tested this on MOSS 2007 and it did some weird things to my tab highlighting that I haven't figured out yet.