I was looking for a similar solution to this plugin. I had researched making my own, but found that editing the admin page to remove, replace or modify the category display in the post edit window is harder than it seems. (No filters or hooks in the code.)
In 3.0, one can use the get_terms filter to modify the categories of a post. (Described here: http://soulsizzle.com/wordpress/filtering-wordpress-categories-using-an-undocumented-hook )
I've found this advice, which really only moves the menu item for the plugin to the USERS menu.
This plugin sets it so that each user can be constrained to a specific category. I'd like to make it so that each user will have their posts assigned to a specific category in addition to whatever they set their category to. Nothing in this plugin (or the code in the forums) will hide the category box in the edit page under 3.0