You can use your idea of switching layouts according to the value selected in Field A. But Layout switching makes the process little bit slow although not noticable. Ohterwise you can do similar kind of things like below.
In the same layout, put one hidden tab having two tabs. In the inspector give names to both these tabs as like"tab1" and "tab2". Put Field B in tab1 with attaching valuelist A and Put Field B in tab2 with attaching valuelist B. Make the tab transparent and make it Fixed width of 0 So that user will never experience that there is sum tab is present.
Attach a script with OnSaveTrigger to Field A that
Field A will populate with option 1... do the process and Go To Object "tab1"
Field A will populate with option 2... Go To Object "tab2"
Please try this process and if you feel it is ok you can use this process otherwise you can use your idea.
Thanx for the tips. Thankfully my DB is not that big so using the multiple layouts is not to much of a hassel. I will keep in mind what you have suggested though.
Thanx again for the tips :)