This module is a hybrid of the Nice Menus module and the Taxonomy Menu module. It displays your categories as a menu in a block with the drop-down features of Nice Menus.
Nice Menus, though awesome, can only be used on menus in the Drupal Menu system, not on menus in blocks like, for example, the Taxonomy Context menu. Adding taxonomy menu items to the menu system can be problematic in D5.
Taxonomy Menu has some serious issues for the 5.x branch, the first and foremost being that it creates it's own aliases to your taxonomy/term pages, and therefore won't work with your pathauto settings for categories. This is also very bad for seo, because now each taxonomy/term page has two unique links to it, and will be read by search engines as "duplicate content".
Features:
choose number of nice taxonomy menu blocks
per block vocabulary selection
optional integration with Nice Menus Styles
configurable prefix and suffix for link text
(example: link text can read "taxi rentals in [category]" or "[category] taxi rentals")