I can give you an example where I think parent/child levels would help:
Our organization has regular/personal memberships and business memberships. I don't like having them all on the same page - it makes the application form too long and potentially confusing, and there's minimal potential overlap between the two categories. It would be great to have new members initially choose between those two parent categories in order to display the appropriate child levels.
Clicking "Regular Membership" would display only the relevant personal categories:
Individual
Family
etc.
Clicking "Business Membership" would display only the relevant categories:
Basic
Supporter
Sponsor
etc.