Gracie,
One thing to look out for in Categories is folders within folders. Create the category in the first level, with all the rest, use add to put what you want into it, RESPRING, then go into the directory you want to put it in, click ADD and then click on the directory you just created, and it will move it there as a sub-directory. Also download SBtoggles if you haven't already, when you open it click on the DOCKS button and add CATEGORIES, CYDIA, BACKGROUNDER,and PKGBACKUP to the dock in Categories. Why? Because if categories or pretty much anything crashes, you will have the most important items available on the SBToggles Dock. I learned the hard way. I was trying to make a sub-directory the wrong way and my TOOLS folder disappeared with all of the above packages and more. Luckily I had put CATEGORIES on the SBToggles Dock and was able to recreate the TOOLS directory.
Good Luck
Pocobear