Category is entered as an ID number, not as the slug or name.
Suggestion for change on the Query Posts Widget "mega form"
from:
category
to:
category (enter ID#)
How to find ID #
A quick way of finding what ID # your category has is to go to
>wp-admin
>Posts >Categories
(Hover over the category and see what the link is in the (status bar)*. Inside of this link is an ID)
here is an example when hovering over a category.
http://website.com/wp-admin/edit-tags.php?action=edit&taxonomy=category&tag_ID=9&post_type=post
In this case category is "9" for Query Posts, not the friendly name that you have given it.
*enable status bar in Firefox 3.0+
>View (check on)Status Bar
