I recently upgrade to WP2.6.2, and now all the category functionality is gone.
The posts had lost all their assigned categories.
However, it's not a big blog, so I can probably go and reassign categories manually.
The problem is that although I can add new categories, they don't seem to 'stick' to my posts. No errors, nothing, it's just that the posts stay uncategorized.
I don't need to recover my old categories - I just want category functionality to work again.