This post describes how Magento navigation works. I hope it will help you.
The begining of all is in template file: “category/navigation/top.phtml”

<ul id="nav">
        < ?php
        foreach ($this->getStoreCategories() as $_category): ?>
            < ?php
            echo $this->drawItem($_category);
            ?>
        < ?php endforeach ?>
</ul>

There we call the method from class Mage_Catalog_Block_Navigation $this->getStoreCategories(). This method returns the array $_nodes from object Varien_Data_Tree_Node_Collection.

This array contains objects of Varien_Data_Tree_Node.
Every node is object of Varien_Data_Tree_Node and it is extension from Varien_Object.

Example 1:

If we wish to see how much categories we have, we can do it with method showed below:

< ?php
echo $this->getStoreCategories()->count();
?>

We will get only number of categories from the first level.

Example 2: (only level 1):

< ?php
foreach ($this->getStoreCategories() as $categories)
{
// $categories is object Varien_Data_Tree_Node extendec Varien_Object

echo $categories->getData('entity_id')."\n";
echo $categories->getData('parent_id')."\n";
echo $categories->getData('level')."\n";
echo $categories->getData('children_count')."\n";
}
?>

Every Varien_Data_Tree_Node contains varible $_childNodes

/**
     * Child nodes
     *
     * @var Varien_Data_Tree_Node_Collection
     */
    protected $_childNodes;
**/

and $_childNodes is instance of Varien_Data_Tree_Node_Collection.

Varien_Data_Tree_Node_Collection contains variable $_nodes which is array with Varian_Data_Tree_Node.

All this “revolves” through recursion …