[Wordpress 3.3] I've found that wp_list_categories doesn't highlight the current category if it's a taxonomy term (and you're in a taxonomy archive), this little snippet fixes that.

currentTaxonomy.php

<?php

// Get the term id first
$term = get_term_by( 'slug', get_query_var( 'term' ), get_query_var( 'taxonomy' ) ); 
$currentTerm = $term->term_taxonomy_id;


// This is how you'd use it in your template
wp_list_categories( array(
	'taxonomy' => 'YOUR_TAXONOMY',
	'current_category' => ( isset($currentTerm) ) ? $currentTerm : null
));

?>