We believe that in the prior release, we had the ability to convert a task to a sub-task and the application would prompt you for the parent task. I have had users report that they can't do this.
As Nic says, do you have sub-tasks enabled:
If so, you should see the option to convert to sub-task in the issue:
Oh, and make sure it's a top-level issue you are trying to convert to a sub-task - there's only two layers, so you won't be offered the convert option if it is already a sub-task type (you will get "change parent" in those cases, for moving it under a different top-level issue)
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