1. Locate the top.phtml
    app\design\frontend\your_interface_name\default\template\catalog\navigation
  1. change the code
  1.         <ul id="nav">
  2.         <?php foreach ($this->getStoreCategories() as $_category): ?>
  3.                 <?php echo $this->drawItem($_category) ?>
  4.         <?php endforeach ?>
  5.         </ul>

to

  1.         <ul id="nav">
  2.         <?php foreach ($this->getStoreCategories() as $_category): ?>
  3.             <?php if($this->htmlEscape($_category->getName())): ?>
  4.                 <?php echo $this->drawItem($_category) ?>
  5.             <?php endif; ?>
  6.         <?php endforeach ?>
  7.         </ul>
  1. Fixed.
    1. <?php if($this->htmlEscape($_category->getName())): ?>

    This checks the category name. If the category is disabled it seems the function returns nothing.

There may be better fixes for this. Lack of documentation on functions, we have to use quick and dirty fixes like these.