As reported by James R Whitehead of interconnectit.com on wp-hackers:
I'm wondering why the html generated by wp_list_pages and
wp_list_categories has changed in the current 2.4-bleeding. I know
things in this are not set in stone so I'm hoping it's not a permanent change as it makes coding CSS menus that work with 2.3 and 2.4 very difficult especially as child item are no longer in a single container. The new structure also makes less sense semantically as each child is now a separate UL.
Changed from:
<ul>
<li>
Text
<ul>
<li>text</li>
<li>text</li>
<li>text</li>
<ul>
</li>
</ul>
To:
<ul>
<li>
Text
<ul>
<li>text</li>
<ul>
<ul>
<li>text</li>
<ul>
<ul>
<li>text</li>
<ul>
</li>
</ul>
