My Permalinks aren’t doing what I want them to do??….

I set my custom permalinks like this: /%category%/%postname%/ but they aren’t displaying in that fashion. For example when I go to on of my post on my site it displays like this: http://www.blahblah.com/category/blah-blah-blah. For some reason the “category” is saying “category” and not the actual “category name”??

Any help would be great.

Thank you
Jared