Subcategories and Passwords

1.) Can someone give me instructions on making subcategories in the blogroll? I know this must be possible.

2. I’m also having the following weird problem. I have my password into the administration panel of my blog permanently on my computer, but I’m going away and will need to administer the blog from another computer. Dang, if I don’t know the password. But when I tell it I’ve lost my passowrd, it sends a link to my email and every time I put that link in my browser, it takes me back to the login page and then again says
“Please enter your username or e-mail address. You will receive a
new password via e-mail.”
And another box below that says:
“Sorry that key does not appear to be valid.”
What does this mean? Help!!!!