Q:

what is the best jquery multiselect picker for hierarchical data

I have a "flat" dropdown picker today with over 200 items.   The issue is that the list is actually a hierarchy of data so I wanted to see if there was any picker that can show a hierarchy of data so people can see where each item fits into the overall list. 
Right now I am concatenating the levels so it would show something like this:
level 1 --> level 2
level 1 --> level 2
level 1 --> level 2 --> level 3

but I thought there might be a better UI widget that would make it easier to pick from a list where the list itself has data a different levels. 

A:

Try this Checkbox Tree
EDIT 1
You can customize it easily to your exact needs, provided you are using the latest version, e.g to change the selecting-of-ancestors when a child is selected.   See below:
(Line 45 onwards of checkboxtree.js)
        onCheck: {
            /**
             * Available values: null, 'check', 'uncheck', 'checkIfFull'
             */
            ancestors: 'check', /* <--- CHANGE THIS */
            /**
             * Available values: null, 'check', 'uncheck'
             */
            descendants: 'check',
            /**
             * Available values: null, 'collapse', 'expand'
             */
            node: '',
            /**
             * Available values: null, 'check', 'uncheck'
             */
            others: ''
        },

EDIT 2
If you have problems getting this to work check:

That you have jquery.checkboxtree.js version 0.5 [version is at line 8 of the file].  
That you are referring to your local copy, and not an external version, and not a minified version
Make sure you've changed 'check' to ''

Changing the source code isn't perhaps best practice.   The official way to change the parameters uses code like this:
    $('#tree7').checkboxTree({
        onCheck: {
            ancestors: '',
            descendants: 'check'
        },
        onUncheck: {
        ancestors: 'uncheck'
        }
    });

You'll find an example almost like that on tab 7 of this page, and can see that it works with the 'checkIfFull' option.   For me the '' option does work too. 