$collection = Mage::getModel('catalog/product')
                        ->getCollection()
                        ->addAttributeToSelect('*');

foreach ($collection as $product) {
    echo $product->getName() . "<br />";
}

- Category
- - SubCategory1
- - - Product 1
- - - Product 2
- - - Product 3
- - SubCategory2
- - - Product 1
- - - Product 2
- - - Product 3

but the default magento navigation would only list my categories and subcategories, not the products. after a bit of tweaking around i noticed that both SubCategory1 and SubCategory2 are level 1 so i only needed to find a way to display products for those categories. That is done easily by extending /core/Mage/Catalog/Block/Navigation.php into your local (/local/Mage/Catalog/Block/Navigation.php) and replacing the function _renderCategoryMenuItemHtml with the one below:

    protected function _renderCategoryMenuItemHtml($category, $level = 0, $isLast = false, $isFirst = false,
        $isOutermost = false, $outermostItemClass = '', $childrenWrapClass = '', $noEventAttributes = false)
    {
        if (!$category->getIsActive()) {
            return '';
        }
        $html = array();

        // get all children
        if (Mage::helper('catalog/category_flat')->isEnabled()) {
            $children = (array)$category->getChildrenNodes();
            $childrenCount = count($children);
        } else {
            $children = $category->getChildren();
            $childrenCount = $children->count();
        }
        $hasChildren = ($children && $childrenCount);

        // select active children
        $activeChildren = array();
        foreach ($children as $child) {
            if ($child->getIsActive()) {
                $activeChildren[] = $child;
            }
        }
        $activeChildrenCount = count($activeChildren);
        $hasActiveChildren = ($activeChildrenCount > 0);

        // prepare list item html classes
        $classes = array();
        $classes[] = 'level' . $level;
        $classes[] = 'nav-' . $this->_getItemPosition($level);
        if ($this->isCategoryActive($category)) {
            $classes[] = 'active';
        }
        $linkClass = '';
        if ($isOutermost && $outermostItemClass) {
            $classes[] = $outermostItemClass;
            $linkClass = ' class="'.$outermostItemClass.'"';
        }
        if ($isFirst) {
            $classes[] = 'first';
        }
        if ($isLast) {
            $classes[] = 'last';
        }
        if ($hasActiveChildren) {
            $classes[] = 'parent';
        }

        // prepare list item attributes
        $attributes = array();
        if (count($classes) > 0) {
            $attributes['class'] = implode(' ', $classes);
        }
        if ($hasActiveChildren && !$noEventAttributes) {
             $attributes['onmouseover'] = 'toggleMenu(this,1)';
             $attributes['onmouseout'] = 'toggleMenu(this,0)';
        }

        // assemble list item with attributes
        $htmlLi = '<li';
        foreach ($attributes as $attrName => $attrValue) {
            $htmlLi .= ' ' . $attrName . '="' . str_replace('"', '\"', $attrValue) . '"';
        }
        $htmlLi .= '>';
        $html[] = $htmlLi;

        $html[] = '<a href="'.$this->getCategoryUrl($category).'"'.$linkClass.'>';
        $html[] = '<span>' . $this->escapeHtml($category->getName()) . '</span>';
        $html[] = '</a>';

		// Grabbing the products for the category if it's level is 1
		if ($level == 1) {

			$catId = $category->getId();
			$categorie = new Mage_Catalog_Model_Category();
			$categorie->load($catId); // this is category id
			$collection = $categorie->getProductCollection()->addAttributeToSort('name', 'asc');
			$html[] = '<ul>';

			foreach ($collection as $pc)
			{
			    $p = new Mage_Catalog_Model_Product();
			    $p->load($pc->getId());

			    $data = $p->_data;
				$html[] = '<li><a href="/'.$data['url_path'].'">'.$data['name'] .'</a></li>';
			}

			$html[] = "</ul>\n";

		}
		// Done

        // render children
        $htmlChildren = '';
        $j = 0;
        foreach ($activeChildren as $child) {
            $htmlChildren .= $this->_renderCategoryMenuItemHtml(
                $child,
                ($level + 1),
                ($j == $activeChildrenCount - 1),
                ($j == 0),
                false,
                $outermostItemClass,
                $childrenWrapClass,
                $noEventAttributes
            );
            $j++;
        }
        if (!empty($htmlChildren)) {
            if ($childrenWrapClass) {
                $html[] = '<div class="' . $childrenWrapClass . '">';
            }
            $html[] = '<ul class="level' . $level . '">';
            $html[] = $htmlChildren;
            $html[] = '</ul>';
            if ($childrenWrapClass) {
                $html[] = '</div>';
            }
        }

        $html[] = '</li>';

        $html = implode("\n", $html);
        return $html;
    }

The rest of the file stays the same. Note this works on magento > 1.4

SET FOREIGN_KEY_CHECKS=0;

TRUNCATE `sales_flat_order`;
TRUNCATE `sales_flat_order_address`;
TRUNCATE `sales_flat_order_grid`;
TRUNCATE `sales_flat_order_item`;
TRUNCATE `sales_flat_order_status_history`;
TRUNCATE `sales_flat_quote`;
TRUNCATE `sales_flat_quote_address`;
TRUNCATE `sales_flat_quote_address_item`;
TRUNCATE `sales_flat_quote_item`;
TRUNCATE `sales_flat_quote_item_option`;
TRUNCATE `sales_flat_order_payment`;
TRUNCATE `sales_flat_quote_payment`;
TRUNCATE `sales_flat_shipment`;
TRUNCATE `sales_flat_shipment_item`;
TRUNCATE `sales_flat_shipment_grid`;
TRUNCATE `sales_flat_invoice`;
TRUNCATE `sales_flat_invoice_grid`;
TRUNCATE `sales_flat_invoice_item`;
TRUNCATE `sendfriend_log`;
TRUNCATE `tag`;
TRUNCATE `tag_relation`;
TRUNCATE `tag_summary`;
TRUNCATE `wishlist`;
TRUNCATE `log_quote`;
TRUNCATE `report_event`;

ALTER TABLE `sales_flat_order` AUTO_INCREMENT=1;
ALTER TABLE `sales_flat_order_address` AUTO_INCREMENT=1;
ALTER TABLE `sales_flat_order_grid` AUTO_INCREMENT=1;
ALTER TABLE `sales_flat_order_item` AUTO_INCREMENT=1;
ALTER TABLE `sales_flat_order_status_history` AUTO_INCREMENT=1;
ALTER TABLE `sales_flat_quote` AUTO_INCREMENT=1;
ALTER TABLE `sales_flat_quote_address` AUTO_INCREMENT=1;
ALTER TABLE `sales_flat_quote_address_item` AUTO_INCREMENT=1;
ALTER TABLE `sales_flat_quote_item` AUTO_INCREMENT=1;
ALTER TABLE `sales_flat_quote_item_option` AUTO_INCREMENT=1;
ALTER TABLE `sendfriend_log` AUTO_INCREMENT=1;
ALTER TABLE `sales_flat_order_payment` AUTO_INCREMENT=1;
ALTER TABLE `sales_flat_quote_payment` AUTO_INCREMENT=1;
ALTER TABLE `sales_flat_shipment` AUTO_INCREMENT=1;
ALTER TABLE `sales_flat_shipment_item` AUTO_INCREMENT=1;
ALTER TABLE `sales_flat_invoice` AUTO_INCREMENT=1;
ALTER TABLE `sales_flat_invoice_grid` AUTO_INCREMENT=1;
ALTER TABLE `sales_flat_invoice_item` AUTO_INCREMENT=1;
ALTER TABLE `sales_flat_shipment_grid` AUTO_INCREMENT=1;
ALTER TABLE `tag` AUTO_INCREMENT=1;
ALTER TABLE `tag_relation` AUTO_INCREMENT=1;
ALTER TABLE `tag_summary` AUTO_INCREMENT=1;
ALTER TABLE `wishlist` AUTO_INCREMENT=1;
ALTER TABLE `log_quote` AUTO_INCREMENT=1;
ALTER TABLE `report_event` AUTO_INCREMENT=1;

-- lets reset customers
TRUNCATE `customer_address_entity`;
TRUNCATE `customer_address_entity_datetime`;
TRUNCATE `customer_address_entity_decimal`;
TRUNCATE `customer_address_entity_int`;
TRUNCATE `customer_address_entity_text`;
TRUNCATE `customer_address_entity_varchar`;
TRUNCATE `customer_entity`;
TRUNCATE `customer_entity_datetime`;
TRUNCATE `customer_entity_decimal`;
TRUNCATE `customer_entity_int`;
TRUNCATE `customer_entity_text`;
TRUNCATE `customer_entity_varchar`;
TRUNCATE `log_customer`;
TRUNCATE `log_visitor`;
TRUNCATE `log_visitor_info`;

ALTER TABLE `customer_address_entity` AUTO_INCREMENT=1;
ALTER TABLE `customer_address_entity_datetime` AUTO_INCREMENT=1;
ALTER TABLE `customer_address_entity_decimal` AUTO_INCREMENT=1;
ALTER TABLE `customer_address_entity_int` AUTO_INCREMENT=1;
ALTER TABLE `customer_address_entity_text` AUTO_INCREMENT=1;
ALTER TABLE `customer_address_entity_varchar` AUTO_INCREMENT=1;
ALTER TABLE `customer_entity` AUTO_INCREMENT=1;
ALTER TABLE `customer_entity_datetime` AUTO_INCREMENT=1;
ALTER TABLE `customer_entity_decimal` AUTO_INCREMENT=1;
ALTER TABLE `customer_entity_int` AUTO_INCREMENT=1;
ALTER TABLE `customer_entity_text` AUTO_INCREMENT=1;
ALTER TABLE `customer_entity_varchar` AUTO_INCREMENT=1;
ALTER TABLE `log_customer` AUTO_INCREMENT=1;
ALTER TABLE `log_visitor` AUTO_INCREMENT=1;
ALTER TABLE `log_visitor_info` AUTO_INCREMENT=1;

-- Now, lets Reset all ID counters
TRUNCATE `eav_entity_store`;
ALTER TABLE `eav_entity_store` AUTO_INCREMENT=1;

SET FOREIGN_KEY_CHECKS=1;

 TRUNCATE TABLE `catalog_category_entity`;
 TRUNCATE TABLE `catalog_category_entity_datetime`;
 TRUNCATE TABLE `catalog_category_entity_decimal`;
 TRUNCATE TABLE `catalog_category_entity_int`;
 TRUNCATE TABLE `catalog_category_entity_text`;
 TRUNCATE TABLE `catalog_category_entity_varchar`;
 TRUNCATE TABLE `catalog_category_product`;
 TRUNCATE TABLE `catalog_category_product_index`;

 insert  into `catalog_category_entity`(`entity_id`,`entity_type_id`,`attribute_set_id`,`parent_id`,`created_at`,`updated_at`,`path`,`position`,`level`,`children_count`) values (1,3,0,0,'0000-00-00 00:00:00','2009-02-20 00:25:34','1',1,0,1),(2,3,3,0,'2009-02-20 00:25:34','2009-02-20 00:25:34','1/2',1,1,0);
 insert  into `catalog_category_entity_int`(`value_id`,`entity_type_id`,`attribute_id`,`store_id`,`entity_id`,`value`) values (1,3,32,0,2,1),(2,3,32,1,2,1);
 insert  into `catalog_category_entity_varchar`(`value_id`,`entity_type_id`,`attribute_id`,`store_id`,`entity_id`,`value`) values (1,3,31,0,1,'Root Catalog'),(2,3,33,0,1,'root-catalog'),(3,3,31,0,2,'Default Category'),(4,3,39,0,2,'PRODUCTS'),(5,3,33,0,2,'default-category');

TRUNCATE TABLE `catalog_product_bundle_option`;
TRUNCATE TABLE `catalog_product_bundle_option_value`;
TRUNCATE TABLE `catalog_product_bundle_selection`;
TRUNCATE TABLE `catalog_product_entity_datetime`;
TRUNCATE TABLE `catalog_product_entity_decimal`;
TRUNCATE TABLE `catalog_product_entity_gallery`;
TRUNCATE TABLE `catalog_product_entity_int`;
TRUNCATE TABLE `catalog_product_entity_media_gallery`;
TRUNCATE TABLE `catalog_product_entity_media_gallery_value`;
TRUNCATE TABLE `catalog_product_entity_text`;
TRUNCATE TABLE `catalog_product_entity_tier_price`;
TRUNCATE TABLE `catalog_product_entity_varchar`;
TRUNCATE TABLE `catalog_product_link`;
TRUNCATE TABLE `catalog_product_link_attribute`;
TRUNCATE TABLE `catalog_product_link_attribute_decimal`;
TRUNCATE TABLE `catalog_product_link_attribute_int`;
TRUNCATE TABLE `catalog_product_link_attribute_varchar`;
TRUNCATE TABLE `catalog_product_link_type`;
TRUNCATE TABLE `catalog_product_option`;
TRUNCATE TABLE `catalog_product_option_price`;
TRUNCATE TABLE `catalog_product_option_title`;
TRUNCATE TABLE `catalog_product_option_type_price`;
TRUNCATE TABLE `catalog_product_option_type_title`;
TRUNCATE TABLE `catalog_product_option_type_value`;
TRUNCATE TABLE `catalog_product_super_attribute`;
TRUNCATE TABLE `catalog_product_super_attribute_label`;
TRUNCATE TABLE `catalog_product_super_attribute_pricing`;
TRUNCATE TABLE `catalog_product_super_link`;
TRUNCATE TABLE `catalog_product_enabled_index`;
TRUNCATE TABLE `catalog_product_website`;
TRUNCATE TABLE `catalog_product_entity`;
TRUNCATE TABLE `cataloginventory_stock`;
TRUNCATE TABLE `cataloginventory_stock_item`;
TRUNCATE TABLE `cataloginventory_stock_status`;
insert  into `catalog_product_link_type`(`link_type_id`,`code`) values (1,'relation'),(2,'bundle'),(3,'super'),(4,'up_sell'),(5,'cross_sell');
insert  into `catalog_product_link_attribute`(`product_link_attribute_id`,`link_type_id`,`product_link_attribute_code`,`data_type`) values (1,2,'qty','decimal'),(2,1,'position','int'),(3,4,'position','int'),(4,5,'position','int'),(6,1,'qty','decimal'),(7,3,'position','int'),(8,3,'qty','decimal');
insert  into `cataloginventory_stock`(`stock_id`,`stock_name`) values (1,'Default');

So to recapitulate, I did the following (citing the other guys, thanks to atlasit, ajayksh and rune00):

1) write a list of the additional statuses that you want

2) download and open the file Magento\app\code\core\Mage\Sales\etc\config.xml
(do not upload it again as soon as you’re done, you need to place it into a different folder, see below)

3) find this code:

<pending translate="label"><label>Pending</label></pending>

and after that add your own new custom status

<my_new_custom_status translate="label"><label>My New Custom Status</label></my_new_custom_status>

4) Now find this code, a few lines below:

<states>
  <new translate="label">
    <label>New</label>
    <statuses>
      <pending/>
    </statuses>
  </new>

and under or above this block create a new block with your own custom status:

<states>

  <new translate="label">
    <label>New</label>
    <statuses>
      <pending/>
    </statuses>
  </new>

  <my_new_custom_status translate="label">
    <label>My New Custom Status</label>
    <statuses>
      <my_new_custom_status/>
    </statuses>
  </my_new_custom_status>

repeat this (step 3 and 4) for each new custom status

5) So that you can change your status from the admin interface back and forth
from any current status, you need to edit again each of the status code block
as follows.

change this

<new translate="label">
    <label>New</label>
    <statuses>
      <pending/>
    </statuses>
  </new>

to this

<new translate="label">
    <label>New</label>
    <statuses>
      <my_new_custom_status/>
      <pending/>
      <processing/>
      <holded/>
      <complete/>
      <closed/>
      <canceled/>
    </statuses>
    <visible_on_front/>
  </new>

you need to do this with all of the existing statuses and the new custom statuses that you’ve just created

so that these new statuses do not only become available and visible to the admin, but also to the customer
on his “my account” page (order history, current status), you need to make the new statues visible (thanks to rune00)
with the tag , as described above.

6) After you saved your changes, upload the new config.xml file to
/app/code/local/Mage/Sales/etc/ (you will need to create that folder structure)

7)Create a file named Mage_Sales.xml with the following content (thanks to atlasit)

<?xml version="1.0"?>
<config>
    <modules>
        <Mage_Sales>
            <active>true</active>
            <codePool>local</codePool>
        </Mage_Sales>
    </modules>
</config>

Upload it to /app/etc/modules/

that’s pretty much it.

If you got it running successfully as well, let us know so that it will help others as well.

First thing I did was to look on magento forums how to get all store categories. After finding this great thread, i came up with this little script which I put into my template folder in /catalog/allcategories.phtml:

$category = Mage::getModel ( 'catalog/category' );
$tree = $category->getTreeModel ();
$tree->load ();

$ids = $tree->getCollection ()->getAllIds ();

if ($ids) {
$fp = fopen('var/import/catwithid.csv', 'a');
fwrite($fp,  'catId, catName\n');
foreach ( $ids as $id ) {
                $string = $id . ', ' .$category->load($id)->getName() . '\n';
fwrite($fp,  $string);
}
fclose($fp);
}

As a note, you need to make sure that /var/import/catwithid.csv exists and it's writeable by your web server. You can make sure it is by chmod-ing it to 777

touch var/import/catwithid.csv # we create the file
chmod 777 var/import/catwithid.csv #make sure it's writeable

Since this was a dev install, I then just loaded that script into a block element by editing the Home Page inside the CMS section:

{{block type="core/template" template="catalog/allcategories.phtml"}}

Hope this helps someone