The CSS Navigation Menu was not designed to work with 2 dynamic levels. This would cause issues with nested repeat regions. There MIGHT be ways to do this, but not through the extensions interface, only with changes in the code.
I modded mine to work with 2 dynamic levels and also included some first level static links as well. It basically requires 2 tables (one for first level labels the second for actual links). if you work off of a 2 level static design you can see where you will need to add in your code for the repeated regions.
I needed a 2 level dynamic menu so links could be added/removed via a CMS and this extension really helped speed up the navigation build process.
I could supply example code if anyone would be interested in it.
Thanks for implementing the two level dynamic menus in the latest (1.0.1) release but do you have a video or some documentation as to how to get it to work e.g. do I need two tables, one for each level? What columns should be in the table and how do I get the menu items under the right menu headings? I have had a few experiments with this but so far no success.