i need to allow the user to select a top level category from one select box and to automatically populate the sub-category.. etc how can i handle big data like eBay in select tags how can i do that with easy way?
Since you want achieve this via Ajax and you haven't specified any framework, and assuming you know how to use Ajax, all you need is to pass the top level category as a parameter to a server-side script which runs a query and gets all the sub-categories. These can be output as XML or using a suitable delimiter. On the client-side on receiving the response, parse it to get all the categories. You can use the add() method, or the options[] array to insert a new option.
Make an attempt and if you get stuck, post your code.