If you structure your WSS sites  in the following way, you could use the workplace navigation webparts from CorasWorks to accomplish your goal.
Tier 1: Sales and Marketing
Tier 2: Sales, Functions, ....
Tier 3: 5 WSS connected to Sales, X Sites connected to Functions, ....
Check out enterprise.corasworks.net/.../default.aspx for some examples.
username: sps\spsguest, password: coras123

Thanks for your suggestion. The examples look fine, but I think “Workplaces” is a custom built webpart and this kind  of option might not be there in SPS. Right?

Yes you're right, these web parts are not standard SPS, but they are commercially available from CorasWorks. Check out
www.corasworks.net/.../...placeviewadvancedv3.html
for details about product and pricing.

When I tried importing an Excel sheet on to a SPS List using “Import Spreadsheet” option, here are the steps:

I gave the name of the List and mentioned the location and clicked Import
Then I select “Range of Cells” from the window that displayed and gave the range
After providing all these details I clicked on Import

After this I got an error message “The selected Range cannot be converted to a List before publishing or the existing list is invalid”. Why am I getting this error?

not sure why this happens. Never seen this before.
Just to ask the obvious. Are you working with Exchange 2003? Did you provide a new list name (you can't import to an existing list this way)?

Should have read Excel 2003 not Exchange 2003 ;-).

I resolved the issue but in a different way, I copied the entire content on to a new Excel sheet and it worked out. But still I don’t know what might have gone wrong earlier.

You can use Areas instead of sites.

My organization has implemeneted something similar.

Lets say your sales site  http://hp/Sales/default.aspx

You want to show five Areas in this sites  if you define five areas

You can show all thos areas in the site and in these area you can also restrict permissions.

Let us say area1 of this site contains confidenatial data of sales  which only three people are authorized to see.

You can remove all permissions and just add those three people.

Lets say area 2 has got genaeral inofrmation and anybody who has access to sales site should be able to see it then you can inherit all users from the Parent Sales site.