If you want to create a horizontal drop down menu, you can make use of the Primary Links menu. Apply the Fusion theme to your Drupal site and install the Skinr module. You can find the Skinr settings @ Administer -> Site building -> Themes -> <Your Fusion Starter Theme> -> configure.
For vertical dropdown, it is just the same as above except you need to make it as drop down in the block configuration. For example, i want to convert the navigation menu in the first sidebar into dropdown. Go to Adminster -> Site building -> Blocks, find out the navigation menu and click configure.