reating custom columns (also called custom field types or CFTs) is the
best practice (as opposed to creating a custom data entry form). Once the CFTs
are created and deployed, it can be reused anywhere,

Heres a link for what you need:
http:// datacogs.com/ datablogs/ archive/2007 /08/26/641.aspx

There is no out of the box solution.

There are few ways using xslt or coding. If you search using "cascaded drop  down
in sharepoint list" you will get right links to achieve your requirement.

It's possible that a third-party relational dropdownlist control might do
this for you; the only issue is whether it can be bound to a SharePoint
list.

I literally just did this yesterday!

Check this out:
http://spservices.codeplex.com/

So, it's jQuery and they use the SP Web Services model to get data from other
lists. In particular I used this:
http://spservices.codeplex.com/wikipage?title=%24%28%29.SPServices.SPCascadeDrop\
downs&referringTitle=Documentation

I'm not certain of its reach outside of a Site Collection. The example they use
has three different lists, however, I used the same list  with three lookup
columns. The first lookup column populated the next two based  on their reference
to the first. Read it and you'll understand a little better. If you have any
questions just post them up here and we'll try to help

You may have to use cascading dropdown  functionality to achieve this. Is the
data for these 2 dropdowns  coming from 2 different lists? If so, make sure
you include look up columns appropriately. The following link might help you
achieve this using jQuery.

http://spservices.codeplex.com/wikipage?title=$%28%29.SPServices.SPCascadeDropdo\
wns&referringTitle=Documentation