So far this is the best way I have found to implement categories for blogger , it's very simple to set up, put a few lines of code into your template, setup some categories, turn on the show link field under settings/formatting and when you post use a name from one of the categories you setup earlier and type that into the link field, all the posts tagged with that name will show up when a category is selected. I have found it useful on other blogs that I use to separate Video posts, picture posts and news posts.
I don't really need to use this on this blog mainly because I have stuff all posts.
One thing I'm not sure of with this is that the title of the post becomes a clickable link that leads to a 404 not found page, the only difference between the post title address and the category link address is a ? Mark before the category name, so I'm sure it could easily be fixed to lead to the category pages but I'm not sure how to achieve this.
The site that has this Blogger categories tutorial has a load of other helpful tips and trick.
Categories, Category, Blogger, Blogspot, Script