I have found a great work-around for this. It really only works practically if you want to be able to select up to 4 or so options from your drop down list but here it is:
For each "item" create as many rows as drop-down items you'd like to be able to select. So if you want to be able to select up to 3 characteristics from a given drop down list for each person on your list, create a total of 3 rows for each person. Then merge A:1-A:3, B:1-B:3, C:1-C:3 etc until you reach the column that you'd like your drop-down list to be. Don't merge those cells, instead place the your Data Validation drop-down in each of those cells.
Hope this is clear!!