Did you get to the bottom of this mate?
I dug some of my old stuff out, but unfortunately this wasn't specifically one of the many pains I went through when trying to hack my way through PHP.
My instincts tell me you need to repost the page after the first drop-down select action to trigger an SQL query based on that value to get and populate the second dropdown.
<select onchange='this.form.submit()' name='yourvalue'> seems like part of what you need
yourvalue being the value in your first dropdown
<option value=>$result[the query to populate the dropdown, not sure how to return a list!]</option>