Categories Not Being Displayed as Tree

Dear Tech Support,

I have followed the instructions in http://stackideas.com/forums/display-a-list-of-child-categories-in-this-category to a tee but Categories are still being displayed in a flat instead of tree structure (as in http://screencast.com/t/GsTTk2ImrO8I). Attached please find the screen captures for my Layout settings and front-end display.

Could you please let me know how I can resolve this?

Thanks!