Magnus-
Well, I tried the category function on my local machine again, and it _seems_ to work OK.
There's still a bug in that text which is typed directly next to a category tag is appended to the category header, e.g. if I type
[[Category:Dogfood]] is tasty
then the categories header says
"Categories: [[Dogfood]] is tasty"
The text "is tasty" is thus duplicated (in the header, and where it was typed).
You can see this here: http://test.wikipedia.org/wiki/Categories2
Regards,
Erik