Requirement

Cascading drop-down menus in a document library. SharePoint 2010 does not support this by default but you can work around this by using JQuery.

Solution

I used the following solution. However, one of the problems I encountered was that datasheet view does not present the values properly. If you try to edit the metadata using datasheet view, the filter will not apply to the sub-category column and you will get a list of all sub categories.

The steps of the solution presented are basically:

1. Create a list for the parent category.
2. Create a list for the sub category.
3. Create the required columns in the list you wish to implement cascading drop downs.
4. Edit the EditForm.aspx and insert javascript.

http://www.uccorner.com/253/sharepoint/cascading-drop-down-sharepoint-foundation-2010/