I don't think that's going to solve his problems. I think he's describing the same thing I'm seeing with RC3.
For a visual, try this....
Start here: http://www.coolscifi.com/gallery/
OK, that looks good. Now click on the "Battlestar Galactica" category here: http://www.coolscifi.com/gallery/browseimages.php?c=60
OK, that stil looks good. But now click on the "Sci-Fi & Fantasy" parent category here: http://www.coolscifi.com/gallery/browseimages.php?c=14
Scroll down a bit.... oooohhh, that doesn't look good at all.
I haven't had a chance to tear it apart yet to see if it's really a problem or not. I looks like it's sorting it by the Display Order value only and isn't taking into account that some of the entries 2 levels deep should be grouped together by the category at 1 level deep.