Category based navigation

Hey there,

i’m attempting to create a category based navigation that would look something like this:

Main Nav: Home | Category 1 | Category 2 | Category 3 | Category 4
Sub nav: Child of Cat 2 | Child of Cat 2 | Child of Cat 2 | Child of Cat 2

Basically, what I want is to show the children categories of the main categories.

I’ve been trying to get it running with the wp_list_categories() function, but for some reason, it doesn’t seem to work once you get into archive pages, or single entry pages.
Here is the code i’m currently working with:

<div id="upperNav">
		<div class="navLinks"><a href="<?php bloginfo('url'); ?>"<?php if ( is_home()) { ?> id="active"<? } ?>>Home</a>  <a href="<?php bloginfo('url'); ?>/category/news/"<?php if ( is_category('news')) { ?> id="active"<? } ?>>News</a>  <a href="<?php bloginfo('url'); ?>/category/reviews/"<?php if ( is_category('reviews')) { ?> id="active"<? } ?>>Reviews</a>  <a href="<?php bloginfo('url'); ?>/category/videos/"<?php if ( is_category('videos')) { ?> id="active"<? } ?>>Videos</a>  <a href="<?php bloginfo('url'); ?>/category/features/"<?php if ( is_category('features')) { ?> id="active"<? } ?>>Features</a>  <a href="<?php bloginfo('url'); ?>/category/games/"<?php if ( is_category('games')) { ?> id="active"<? } ?>>Games</a>  <a href="<?php bloginfo('url'); ?>/shop/"<?php if ( is_category('shop')) { ?> id="active"<? } ?>>Shop</a></div>
		<?php include (TEMPLATEPATH . '/searchform.php'); ?>
		<div class="clearMe"></div>
	</div>
	<ul id="lowerNav" class="sf-menu">
			<?php if ( is_home() || is_category('news')) {
					$catVar = $newsCategoryVar; ## Show only if in NEWS category or home page
				} elseif ( is_category('reviews')) {
					$catVar = $reviewsCategoryVar; ## Show only if in REVIEWS category
				} elseif ( is_category('videos')) {
					$catVar = $videosCategoryVar; ## Show only if in VIDEOS category
				} elseif ( is_category('features')) {
					$catVar = $featuresCategoryVar; ## Show only if in FEATRUES category
				} elseif ( is_category('games')) {
					$catVar = $gamesCategoryVar; ## Show only if in GAMES category
			};
			if (isset($catVar)) {
				## echo 'You are viewing the children of the ' . $catVar . ' Category';
				wp_list_categories('child_of=' . $catVar . '&current_category=' . $catVar . '&hierarchical=1&title_li=0&depth=1&hide_empty=1');
			} ?>
	</ul>

Any help would be greatly appreciated!