Someone in the thread on friendliness mentioned that categories are
always in one language (usually english). Well still a long way from
fixing the issue, perhaps if we allowed unrestricted
{{DISPLAYTITLE:...}}, combined with the {{int: hack, that'd allow
better translatable categories. (of course you'd only be able to use
the actual category name in [[category:Foo]] links. I suppose one
could use a bot to automatically change links to redirect categories
to their canonical name, but then we're getting really really hacky).
Anyways, just a thought.
cheers,
bawolff