Yes it can be done with CSS.

You would use the psuedo class :hover on an li element but IE won't understand this without an additional .htc file or javascript. You may want to read this article which explains in detail the "Suckerfish Dropdown" menu system which to date is perhaps one of the best constructed css menu systems.

http://www.alistapart.com/articles/dropdowns

You can also see the css menu's in action here http://www.htmldog.com/articles/suckerfish/example/