Currently the collapse and expand only work on top-level menu items within the side menu. When you run a store of a decent size, you end up with parent > sub > sub > sub menu items. This in turn means you end up with a very difficult to use side-menu, which is convoluted.
I think it would be prudent to add into the next update a expand/collapse system to accommodate the bigger menu structures.
I also had to do a quick fix on the highlighting which I think needs to be dropped in:
.product-categories .children li.current-cat .children a{ color: whatever; }
.product-categories .children li.current-cat .children li.current-cat a{ color: whatever; }
