I've written a design proposal for category support on LiveJournal, based on the design of FotoBilder. I also logged a Zilla bug for category support, though it would probably best to discuss implementation here first and post the outcome(s) in Zilla later, since Bugzilla isn't really set up for discussion. (No threading, for one thing)
I think I addressed most of the technical issues, and some of the social ones. It's by no means complete, though, and I identified some particular points that need discussion at the end of the document.
So… umm… discuss?