This kind lady will help you.
     http://www.contextures.com/tiptech.html

You can set up two separate drop down lists that are linked, if you use the
actual controls and not just the within-cell validation. Now that I think
about it, you could probably use the in-cell validation too, although I'd
have to think about the details if you had a bunch of rows where you wanted
to do this selection.

If you set a cell to equal your first combobox value (or first data
validation cell, etc.), then use that as a source for vlookup which could
return a column letter for your target sub-list. Maybe put this value in
your third column, so that each of your sub-list selection cells would be
able to use it's own pointer to the appropriate sublist. Then set your
second combobox or data validation cell to a named range that picks your
sub-list using the "indirect" worksheet function.

That's just off the top of my head, and the details really will depend on
whether you are using data validation or comboboxes (and maybe whether you
are using comboboxes on the worksheet itself, or on a userform)

Comrade Burlingham,

This is actually pretty simple, it just took me about a half hour to figure
out what the syntax is for the IF formula you put in your secondary (or
tertiary, or quaternary, whatever) dropdown list validation cell.

Example:  I have a basic list of general property types:  Retail, office and
industrial.  In cell B1, I want the user to select one of the 3 types.  In
B2, though, I want her to select the SUBtype; i.e., if she selects Retail in
B1, I want her to see only the retail subtypes in B2.   If she selects Office
or Industrial in B1, I want her to see only the Office or Industrial subtype
list when she clicks the B2 dropdown.  Let's say I've created the four
(General, Retail, Office and Industrial) dropdowns in another sheet in the
same workbook and have given each range the names George, Ronald, Oscar and
Izzy, though giving them the same names as the categories is okay, too).  
Then I go back to cell B1 in my main sheet and select Data | Validation
(Excel 2007), choose List and write in the formula, =George.  When done, if I
select cell B1, I'll have a dropdown that lists Retail, Office and
Industrial.  Then I go to cell B2, select Data | Validation, choose List,
and--here's the secret--enter an IF formula as follows:

=IF(B1="Retail",Ronald,IF(B1="Office",Oscar,IF(B1="Industrial",Izzy,"Wrongamundo, Buckwheat!")))

There are 3 IF statements, so you have to have 3 closing parens on the end,
of course.  But the trick is to identify the text in B1 in quotes (because
text is what Excel will see there), and the named range WITHOUT quotes,
because Excel sees it as a range address, not as text.  The formula really
won't return "Wrongamundo, Buckwheat!" if the user fails to select one of the
three types, because those are the only ones I allowed.  But I could have
allowed a user-created entry.

Pretty slick, eh?  The cool part is you can create as many dropdown levels
as you have levels of patience to enter long, nested "IF" formulas...
__________________________