Categories is better in theory than in practice. I jailbroke my iPhone specifically for stuff like Categories, and while it was cool for a while, it just wasn't integrated enough into the Springboard. Specifically, I would tap on a folder to go to an app. Then I would run the app, quit to the Springboard, then go back to the same folder, run another app, lather, rinse, repeat. It was just too clunky for my usage because the time it would take to get back into the folder wasn't brief (even if I kept the folder resident in memory).
Then the next challenge was the firmware updates. After a jailbreak update, all of the folders as well as the app icons would be missing. So, then I'd have to reinstall Categories. Then, I'd have to recreate all the folders and then try to remember which icons went where. Even with the jailbreak backup utility, I never got these settings back.
So...the idea of Categories is great, but the implementation didn't do it for me personally. It would be fantastic if Apple implemented some kind of app organization. The iPhone really needs it!
--DotComCTO
P.S. I'm off the jailbreak for now. It was just more trouble than it was worth to me.