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Here is a nested sortable from jQuery. It's just awesome, one of my favorite jQuery widgets.

http://mjsarfatti.com/sandbox/nestedSortable/

I looked at YUI3, it has Sortable widget, I'm sure it can be extended to add the functionality of nested sortable.
The jQuery example actually extends the jQuery's Sortable module.

This widget if very useful when you have to visually organize a list of categories with subcategories. For example if you have some type of web directory (think like dmoz), or a forum like phpbb that has unlimited nested sub-forums. It's great to have this ability to visually rearrange your nested categories.

If someone makes it it will be a great addition to YUI3.