Index: /Users/Scott/Sites/wp/trunk/wp-includes/category-template.php
===================================================================
--- /Users/Scott/Sites/wp/trunk/wp-includes/category-template.php	(revision 11745)
+++ /Users/Scott/Sites/wp/trunk/wp-includes/category-template.php	(working copy)
@@ -344,6 +344,11 @@
 	$defaults['selected'] = ( is_category() ) ? get_query_var( 'cat' ) : 0;
 
 	$r = wp_parse_args( $args, $defaults );
+	
+	if ( !isset( $r['pad_counts'] ) && $r['show_count'] && $r['hierarchical'] ) {
+		$r['pad_counts'] = true;
+	}
+	
 	$r['include_last_update_time'] = $r['show_last_update'];
 	extract( $r );