I just started working on something similar actually. I have a client for a Winery that has X number of categories and X number of products in each category as well. There's a pretty slick Image Sorter (I'd have to look up what it's called again, but if you look up the word Sort in the Online Components you'll find it). I altered it to make it work with a horizontal menu that had accordion type dropdowns that allowed for multiple categories and sub-categories. It is a very nice flowing item that is just elegant on the page. Then I replaced the actual Images that it was categorizing, with image Links so that it will go to a product page when clicked. Works pretty slick if I don't say so myself and whoever added that to the Online Components, I can't thank them enough!
Anyways, check that out and see if maybe that will work for you as well? Might save you a lot of headaches with organizing your products as the component will actually do the organizing for you instead.