how did he do these 2 things?

I have seen a blog here

http://www.livingroom.org.au/photolog/

and he has his categories at the top for each individual camera manufactuer.. but mouse over and you will see this

http://www.livingroom.org.au/photolog/reviews/casio/

so i tried to do the same with my blog and I end up with

http://guitarsquad.com/reviews/category/gibson/

I have the word ” category ” in their I dont want that in their. i just want it to be

http://guitarsquad.com/reviews/gibson/

my permalinks under options right now is like this

/reviews/%category%/%postname%/

anytime you click on a post it shows like

http://guitarsquad.com/reviews/gibson/gibson-manhattan-midnight/

which is good for posts but I need to have it so that when someone clicks on a category on the right hand side it shows

http://guitarsquad.com/reviews/gibson/

How do i do that?

2. second question.. How has the guy managed to have it so that when you click on any of his posts .. for example

http://www.livingroom.org.au/photolog/reviews/pentax/pentax_optio_50l.php

it has the name of the post.php it ends in .php?

is there anway to do this?

thank you in advance