Hi tamz - you could try this (warning! untested) for the "PHP function":
<?php
function displayChildren($page, $current, $startmenu = true, $limits = null) {
if ($limits != null && array_key_exists($page->slug, $limits)) {
$arr = array('order' => 'position ASC, published_on DESC', 'limit' => $limits[$page->slug]);
} else
$arr = array('order' => 'position ASC, published_on DESC');
if ($page && count($page->children()) > 0) {
echo ($startmenu) ? '<ul>' : '';
foreach($page->children($arr) as $menu) :
$daddy = (count($menu->children()) > 0 && $menu->level() > 1) ? ' class="daddy"' : null;
$link = (count($menu->children()) > 0 && $menu->level() > 1) ? '#' : $menu->url();
echo '<li><a href="'. $link .'"'. $daddy .'>'. $menu->title() .'</a>';
displayChildren($menu, $current, true, $limits);
echo '</li>';
endforeach;
echo ($startmenu) ? '</ul>' : '';
}
}
?>
Basically, it adds a test like the "$daddy" one which adds the class for the drop-down, but now adds a "$link" variable which will return a clickable URL if it is NOT a parent, but just "#" if it IS a parent.
Let us know if it works! (We live in hope...)