The EE D:OS menu's had some gradual improvements including categories and various sort options, but it still leaves something to be desired. What I find surprising is that some of the functionality from early releases was removed, such as having multiple inventory screens open for the same character, and being able to easily switch between characters in each inventory (you can now only do that in the first to be opened, inexplicably).
My biggest gripe is probably a matter of taste though, and personally I'd rather see a list type inventory with a brief description of the item, such as the one in Oblivion, rather than the hover over something to see what it is, which can become quite time-consuming.
A separate "stuff I want to sell" category would also be really useful to have: a lot of games have this, and it's a nice way of keeping the rest of the inventory relatively uncluttered.
