Looks to me like a problem of menu ITEMIDS. To troubleshoot this, turn of your SEF for now, so you can see ITEMIDs in your URL. Likely you have the same ITEMID for PARTY RENTALS, and the way VM categories works, all cat links will have the same ITEMID as the master VM link in Joomla menu (the first link to VM created).
So normally, you would create a link called STORE in Joomla menu, which might get an itemid of 67 (for example), and all category links from there would use that itemid of 67, so the master link STORE would alway be "active" in the menu.
I am assuming your first link to VM was actually Party Rentals (or at least that is what VM is using as the master itemid), os all category links using my mod, or VM's default mod for that matter, will use the 1st/master itemid.
Unfortunately, my mod won't work the way you are trying to get it to work, because of this inherent problem in VM categories. HOWEVER, you could moduify my mod pretty easily to
1. Use it also as your Main Menu mod, in which it would work the way you want, by adding an XML option to LIMIT the category depth (like you can in Joomla menu systems).
2. Don't use my mod, and create all your sub-categories in Joomla. A very big time use
The fact is, there is no easy solution unless you can hack my categories mod, which again, probably would be what I would do in this instance, as it would be far better in the long run when it comes to adding and removing categories and having the menus update automatically, rather than manually adding Joomla menu links each time.