Dynamic menus can be a handy shortcut, but what if you want to present sub-items in the menu?
The traditional method in desktop software menus is a horizontal fly-out, as shown below:
Many web sites use a similar approach, as in this example from Lands End:
Where there are relatively few top-level options, some sites organize sub-items in vertical columns, as in this example from REI.com:
One approach I've seen only on one site (Mygazines) is a dynamic menu that extends vertically:
A downside with this implementation is that 1) it requires a click to open/close a submenu and 2) It can result in "pushing down" the top-level options so they are more difficult to scan.