Doh! Guess this is a usability bug: You can delete categories, but you have to select "Applications" in the top left, then the categories appear _again_ in the middle column, and then you can click them there and click delete. The 'delete' button doesn't have any context around it to make this behavior intuitive though, I expect to be able to click categories in the left column and just hit the delete key, or right click them and get a context menu with a delete option.
Doh! Guess this is a usability bug: You can delete categories, but you have to select "Applications" in the top left, then the categories appear _again_ in the middle column, and then you can click them there and click delete. The 'delete' button doesn't have any context around it to make this behavior intuitive though, I expect to be able to click categories in the left column and just hit the delete key, or right click them and get a context menu with a delete option.