Have a look at the blocks I developed for 1.9x myCourses and siteNavigation. The latest version combines the two blocks into one and offers popUp-Windows: one for displaying longer category and course names and two to gain in speed on big sites with more than 1'500 courses deeply nested in over 900 categories:
http://moodle.org/mod/forum/discuss.php?d=67494
http://moodle.org/mod/forum/discuss.php?d=103703
For the moment being I have a Moodle 2.05 Server but only for tests, so I can not test the performance of the new navigation on medium to large scale sites like our 1.9 production server is with more than 4'700 courses deeply nested in more than 1'100 categories.
Rosario