There are many tutorials on how to add navigation to your Magento ecommerce website, but not a lot of tutorials on once you add your navigation how to display subcategories.

Step 1:

Open your text editor (Dreamweaver, Notepad++, etc.) and create a new .phtml file.  Copy the following code into your new file:

<?php
   $currentCat = Mage::registry('current_category');

    if ( $currentCat--->getParentId() == Mage::app()->getStore()->getRootCategoryId() )
    {
        $loadCategory = $currentCat;
    }
    else
    {

        $loadCategory = Mage::getModel('catalog/category')->load($currentCat->getParentId());
    }
    $subCategories = explode(',', $loadCategory->getChildren());
	
	
    foreach ( $subCategories as $subCategoryId )
    {
        $cat = Mage::getModel('catalog/category')->load($subCategoryId);

        if($cat->getIsActive())
        {
            echo '<a href="'.$cat-&gt;getURL().'">'.$cat-&gt;getName().'</a>';
        }
    }
?>

Save the file in /app/design/frontend/YOURTEMPLATE/default/template/catalog/navigation/

Step 2:

Open your catalog.xml file located at: /app/design/frontend/YOURTEMPLATE/default/layout/ and copy the following code to the Catalog Category section:

<reference name="right">
 <block template="catalog/navigation/YOURFILE.phtml" before="-" name="catalog.YOURFILE" type="catalog/navigation">
 </block> 
</reference>

Save your catalog.xml file and refresh your cache (screenshot below):

And now you should see your subcategories displayed based off of the Parent navigation.

Need further assistance or help with subcategories, leave your comment or questions below.