I am while using custom menus in WP 3.3.1. I'm able to drag a category right into a menu also it produces a hyperlink for an archive page of all of the posts form that category. Can there be something I'm able to make the functions that forces a listing of all of the posts from that category rather?

So, I'd finish track of something similar to:

<ul>
    <li><a>Category</a>
        <!-- expander -->
        <ul>
            <li><a>Psot 1</a></li>
            <li><a>Post 2</a></li>
            <li><a>Post 3</a></li>
        </ul>
    </li>
</ul>

You are able to by hand add posts recption menus by enabling "posts" within the screen options (click "screen options" within the upper right-hands corner after which tick the "posts" box -- you'll now visit a box with your posts inside it).

Regrettably, though, it may sound as if you want recption menus to update instantly with your posts for any certain category. I am unaware of any method of doing by using custom menus. I believe you'd need to get both hands dirty and really customize the theme to obtain that working...