Naming new categories for SEO purposes

I’m designing a new wordpress site and I’m about to create my categories. My question is how important is it to consider SEO when naming your categories.

e.g. If my site is about fishing and I have 3 categories: fishing books, fishing dvds and fishing equipment. Am I better to name my categories like this for SEO:

Fishing Books, Fishing DVDs, Fishing Equipment

OR

Books, DVD’s, Equipment

Which takes less room, but maybe less good for SEO as the slug links and on page text for the categories are all generic terms.

These categories will be making up my horizontal nav bar so they have to strike a balance between SEO and human readability!

What do you think?

Thanks!