how to build a cross referenced list?

We have different documents that need to show up in a list like this:
--------------------------
Arts and Sciences
  Crafts
      Make Money to Retire... <!-- this is a link <a
href="e-chapters/yadayada/file.htm">-->
      somethingElse... <!-- this is a link <a
href="e-chapters/somethingElse/file.htm">-->
  Hobbies
      Make Money to Retire... <!-- this is a link <a
href="e-chapters/yadayada/file.htm">-->
      somethingElse... <!-- this is a link <a
href="e-chapters/somethingElse/file.htm">-->
-------------------------
There are categories that are broken down by subcategories.  Can anybody
tell me a good approach to this problem? Here is a sample of XML:

<section>
    <section id="e-chapters">
        <directory id="yadayada">
            <label>Make money to retire...</label>
            <category id="Arts and Sciences">
                <subcategory id="Crafts"/>
                <subcategory id="Hobbies"/>
            </category>
        </directory>

        <directory id="somethingElse">
            <label>something else...</label>
            <category id="Arts and Sciences">
                <subcategory id="Crafts"/>
                <subcategory id="Hobbies"/>
            </category>
        </directory>
    </section>

TIA,
Rob



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