Quick and easy way to translate flat arrays into nested arrays in PHP.

nested_terms.php

<?php    
        /**
	 * Wrapper to get terms in a nested fashion.
	 * This gets a little complicated.  Basically, we're creating a placeholder in
	 * $children to hold the child terms of each parent term.  Then we create a
	 * reference to that element in the parent term.  So nesting happens via magic.
	 */
	public function get_terms_nested($args)
	{
		$temp_terms = $this->get_terms($args);

		$terms = array();
		$children = array();

		foreach($temp_terms as $term)
		{
			// Create a placeholder for the object's children.
			if(!isset($children[$term['id']]))
			{
				$children[$term['id']] = array();
			}
			// Create a link to those children.
			$term['children'] = &$children[$term['id']];

			if (!strlen($term['parent_id']))
			{
				$terms[] = $term;
			}
			else
			{
				// Create a placeholder for the parent.
				if(!isset($children[$term['parent_id']]))
				{
					$children[$term['parent_id']] = array();
				}

				// Add this object to the parent, even if it doesn't exist yet.
				$children[$term['parent_id']][] = $term;
			}
		}

		return $terms;
	}