This is a complete replacement for function dropdown_cats in file b2template.functions.php
You should be able to cut and paste from this page
function dropdown_cats($optionall = 1, $all = 'All', $sort_column = 'ID', $sort_order = 'asc',
$optiondates = 0, $optioncount = 0, $hide_empty = 1) {
global $cat, $tablecategories, $tableposts, $querycount, $wpdb;
$sort_column = 'cat_'.$sort_column;
$query = " SELECT cat_ID, cat_name,";
$query .= " COUNT($tableposts.ID) AS cat_count,";
$query .= " DAYOFMONTH(MAX(post_date)) AS lastday, MONTH(MAX(post_date)) AS lastmonth";
$query .= " FROM $tablecategories LEFT JOIN $tableposts ON cat_ID = post_category";
$query .= " WHERE cat_ID > 0 ";
$query .= " GROUP BY post_category ";
if (intval($hide_empty) == 1) {
$query .= " HAVING cat_count > 0";
}
$query .= " ORDER BY $sort_column $sort_order, post_date DESC";
$categories = $wpdb->get_results($query);
++$querycount;
echo "<select name='cat' class='postform'>\n";
if (intval($optionall) == 1) {
$all = apply_filters('list_cats', $all);
echo "\t<option value='all'>$all</option>\n";
}
foreach ($categories as $category) {
$cat_name = apply_filters('list_cats', $category->cat_name);
echo "\t<option value=\"".$category->cat_ID."\"";
if ($category->cat_ID == $cat)
echo ' selected="selected"';
echo '>'.stripslashes($cat_name);
if (intval($optioncount) == 1) {
echo ' ('.$category->cat_count.')';
}
if (intval($optiondates) == 1) {
echo ' '.$category->lastday.'/'.$category->lastmonth;
}
echo "</option>\n";
}
echo "</select>\n";
}