Portfolio Menus and Category Filters


I would like to set up my wordpress.com site to function as both a blog (with posts on the home page) and an art portfolio (accessed via the menu). The Elma Studio demo site for Suidobashi shows a “Portfolio” section in the menu that has subcategories for Photography, Graphic Design, Inspiration, etc., each of which links to a new page capturing all of the posts that have been filed under that category.

How do I do this?

Thanks for your assistance!