Multi Level Drop Down Menu In Blogger

Log in to blogger, go to "Layout", click on "Edit HTML" tab.
Now find (CTRL+F) this in the template:

</head>

Immediately BEFORE it, place this code:

<link rel="stylesheet" type="text/css" href="http://mydatanest.com/............/slidemenu_hori.css" />

<!--[if lte IE 7]>
<style type="text/css">
html .jqueryslidemenu{height: 1%;} /*Holly Hack for IE7 and below*/
</style>
<![endif]-->

<script type="text/javascript" src="http://ajax.googleapis.com/ajax/libs/jquery/1.2.6/jquery.min.js"></script>
<script type="text/javascript" src="http://mydatanest.com/.............../slidemenu_horiz.js"></script>

Now click Save Template

STEP 2:
Now go to "Page Elements" of "Layout".
Add a Gadget of HTML/JavaScript type.

Then add this code in to it:

<div id="myslidemenu" class="jqueryslidemenu">
<ul>
<li><a href="http://www.dynamicdrive.com">Item 1</a></li>
<li><a href="#">Item 2</a></li>
<li><a href="#">Folder 1</a>
<ul>
<li><a href="#">Sub Item 1.1</a></li>
<li><a href="#">Sub Item 1.2</a></li>
<li><a href="#">Sub Item 1.3</a></li>
<li><a href="#">Sub Item 1.4</a></li>
</ul>
</li>
<li><a href="#">Item 3</a></li>
<li><a href="#">Folder 2</a>
<ul>
<li><a href="#">Sub Item 2.1</a></li>
<li><a href="#">Folder 2.1</a>
<ul>
<li><a href="#">Sub Item 2.1.1</a></li>
<li><a href="#">Sub Item 2.1.2</a></li>
<li><a href="#">Folder 3.1.1</a>
<ul>
<li><a href="#">Sub Item 3.1.1.1</a></li>
<li><a href="#">Sub Item 3.1.1.2</a></li>
<li><a href="#">Sub Item 3.1.1.3</a></li>
<li><a href="#">Sub Item 3.1.1.4</a></li>
<li><a href="#">Sub Item 3.1.1.5</a></li>
</ul>
</li>
<li><a href="#">Sub Item 2.1.4</a></li>
</ul>
</li>
</ul>
</li>
<li><a href="http://bdlab.blogspot.com">Blogger Help</a></li>
</ul>
<br style="clear: left" />
</div>

Then save this widget. And drag it just above the posts widget.

Note: this is not allowed all templates.