I’m using WordPress 3.5.1 and EDD 1.5, just installed today.
I have placed the Downloads Categories/Tags widget in my sidebar. I selected Categories under Taxonomy. And while the widget does show up in my sidebar with the list of my categories, when I click the name of any category, I get a 404 error page.
If it matters, the URL in my address bar for the 404 page is:
instant-downloads is the correct slug for my category name. But all I get is the 404 error page. I have two categories right now and I get the same 404 error whichever category I choose in the sidebar widget.