To do this you don't need a lot. I've hinted at this kind of stuff before with my Lookup Select Attribute post. Here I'll spell it out.

  1. Make category variable with the following bits
    • Type: Lookup select box
    • Include none: true
    • Table: sys_choice
    • Reference Qualifier: name=incident^element=category^language=en^inactive=false^ORDERBYsequence
  2. Make subcategory variable with the following bits
    • Type: Lookup select box
    • Include none: true
    • Table: sys_choice
    • Reference Qualifer: javascript: 'name=incident^element=subcategory^language=en^inactive=false^dependent_value=' + current.variables.category
      (note the dependent value column in your query)
    • Attributes: ref_qual_elements=category