observe_field for dynamic tables

Hi all,

I need to create a very simple dynamic table. I am trying to use observe_field for dynamically update select box (so when I click a menu, there will be generated a submenu according to what I have clicked). Attached are my codes (getsubcategories,index, and controller). I followed this tutorial : http://railsforum.com/viewtopic.php?pid=31045#p31045, created a database, but the table won't update it states in the second table based on the database.

I am sorry if this is vague, but I hope from the attachments are easier to pin point what I meant and to help me pointing out my mistake.

Thank you for your kindness response