I got it to look the way I wanted with your coding help and start.. Here is the finished categories box and styling I used:

http://theposhbox.net/ZenCart/

/* CATEGORY SECTION - EXPANDED CATEGORIES LIST MOD */

#categorylistbox {
background: #fbbade;
background-image: url(../images/bg.png);
border: 1px solid #f449a7;
border-radius: 1.5em;
}

#categorylistboxHeading {
background: #f449a7;
font-family: 'Sacramento',century gothic, sans-serif;
font-size: 36px;
color: #ffffff;
border-radius: 20px 20px 0 0;
}

#categorylistboxContent {
background: transparent;
padding-bottom: 12px;
}

A.category-top, A.category-top:visited {
color: #0ca6c0;
text-decoration: none;
}

A.category-top, A.category-top:hover {
color: #0ca6c0;
text-decoration: none;
}

A.category-products, A.category-products:visited {
padding: 1px 2px;
color: #f449a7;
text-decoration: none;
}

A.category-products:hover {
padding: 1px 2px;
background: #fc76c2;
color: #ffffff;
text-decoration: none;
}

A.category-links, A.category-links:visited {
color: #0ca6c0;
text-decoration: none;
}

A.category-links:hover {
color: #f449a7;
text-decoration: none;
}