Wordpress helper method for efficiently organising a hierarchical taxonomy into a hierarchical data structure. Similar code could be used to organise any hierarchical dataset.

hierarchy-sort.php

<?php
/**
 * Recursively sort an array of taxonomy terms hierarchically. Child categories will be
 * placed under a 'children' member of their parent term.
 *
 * @param Array   $cats     taxonomy term objects to sort
 * @param Array   $into     result array to put them in
 * @param integer $parentId the current parent ID to put them in
 */
function sortHierarchicalTaxonomy(Array $cats, Array &$into, $parentId = 0)
{
        foreach ($cats as $i => $cat) {
		if ($cat->parent == $parentId) {
			$into[$cat->term_id] = $cat;
			unset($cats[$i]);
		}
	}

	foreach ($into as $topCat) {
		$topCat->children = array();
		sortHierarchicalTaxonomy($cats, $topCat->children, $topCat->term_id);
	}
}