This mod was a great start to what I needed.

Issue:
The break tags that get automatically added to your code when you type text into the textarea and press 'enter' were not being removed in your php code. I replaced lines 11-17 with this and it removed the break tags that Joomla added:
$html = str_ireplace("", "", $html);

Great module for creating a site hierarchy through your menus! If you don't know your way around Joomla, then you better start learning before you mess with this module. There is documention to get you started but you will have to get off your lazy butt and test the settings yourself because this thing has lots of features which would take 6 months to document well.
Here are my tips for using this mod if you want a site that is more than two levels deep with breadcrumbs that follow the hierarchy:
- create some simple static pages to cover a few levels deep
- create a menu that has multi-levels (eg. a menu with items that are children of children)
- link the different levels of this menu to your static pages

After you have done this (you do not need the module to get this far) and have something working, then you can start assigning your menu to the extended menu module and playing around with the options. Setting the 'Maximum Depth' to 1 for example will not show sub items in the menu even if you are on a sub item page.

[Get work on this module Daniel!]