Forget about your designer  tool for a sec.

Log into your front end web server & search for a file called
"default.master" it should return the location of your default.master &
mwsdefault.master pages.

Open it up in notepad. & scroll down till you find the block of code
like this.

<SharePoint:AspMenu
ID="TopNavigationMenu"
Runat="server"
DataSourceID="topSiteMap"
EnableViewState="false"
AccessKey="<%$Resources:wss,navigation_accesskey%>"
Orientation="Horizontal"
StaticDisplayLevels="2"
MaximumDynamicDisplayLevels="1" <---- Change this to "2"
DynamicHorizontalOffset="0"
StaticPopoutImageUrl="/_layouts/images/menudark.gif"
StaticPopoutImageTextFormatString=""
DynamicHoverStyle-BackColor="#CBE3F0"
SkipLinkText=""
StaticSubMenuIndent="0"
CssClass="ms-topNavContainer">

Just change MaximumDynamicDisplayLevels from "1" to "2"
Save it & just hit F5 on your browser, should let your navigation go
down another level.

My attempt to show  the left tree  view is similar to www.wssdemo.com
site.
Any help on how to make it similar. Do I need to build a custom control  or
its possible customizing OOB tree view  with Designer Tool.
Code snippet would be highly appreciated.

A small Help on this context. I am using the ASP.Net tree  View Menu
available on Office Designer for display the Left Navigation in Tree View.
Every things seems working fine, but it doesn't take the current Context. I
have set  the datasource as the default SiteMapDatasource which gets me the
tree view  content of the home page. The same remains on all the other pages
also, it doesn't pick nav  titles and links from the current context.