Im dissapointed to know that eventhough there is Wordpress support forum for those who seek for help on codings, yet most of their suggestions are quite misleading. Therefore im posting up this entry for those who wish to display their Wordpress category in a hierarchical indent format.
Here is the trick to make the child category indent :-
In your sidebar.php
and replace with
'asc', '', TRUE, FALSE,
TRUE, FALSE, FALSE,
TRUE, FALSE, '', FALSE,
'', '', '',
That's it! Category Indentation Done
If you are using "wp_list_cats" to list out all your categories, you can switch to "list_cats", both of them perform the same, except "list_cats" provides you easier options in displaying all your category.
How does it work: There are total of 18 arguement to be passed into "list_cats", and the 10th arguement (which is the 3rd TRUE value) is what you need to change, change it to TRUE will list the child category indent.
To understand more, you can refer to: Wordpress Codex Template Tags
Thanks to Sapienbryan for the help.
p/s: This solution is for those who still using WP1.5, looks like they have solved this bug in WP1.5.1