In list mode, to open a sub-folder, select it by clicking on it once and then press right arrow for opening it (left arrow closes it).
To open the folder and all of its subfolders, press option-right arrow, and use option-left arrow to close all. If you have already used a right arrow to open the folder leaving the subfolders closed, another option-right arrow will also open the subfolders.
Mac OS X Hints
http://hints.macworld.com/article.php?story=20020212092148605