This is a demo of using recursive template inclusion in Outlast Framework to display nested categories.

categories.html

<h1>Categories</h1>

{% block catlist %}
	<ul>
	{% foreach categories as cat %}
		<li>
			<a href="{{baseurl}}categories/{{cat.friendlyurl}}">{{cat.name}}</a>
			{% if cat.data.subcategories.total > 0 %}
				{% with categories=cat.data.subcategories %}
					{% insert 'categories.html' 'catlist' %}
				{% endwith %}
			{% endif %}
		</li>
	{% endforeach %}
	</ul>
{% endblock catlist %}