SEO – Cateogories in Permalinks

I’ve got something of a dilemma. I’m building up a nice long list of articles but have a few questions on structure before I go further.

1) Currently my permalinks are done the ‘recommended’ way that I’ve seen. This is (a) using subdirectories for the blog/press and not subdomains, and (b) using just domainname.com/carblog/subject-of-post/ as my permalink. Should I continue to do it this way or would I be better off putting in categories, e.g. domainname.com/carblog/audi/subject-of-post and domainname.com/carblog/bmw/subject-of-post given the potential extra weight of the categories in the URL that are related to the subject? I hear all sorts of questions about utility past the 66th or so character in a URL so I’m hoping someone might address this. All my competitors use something, mostly subdomains for each category and they do well (they also have a million dollar budget.)

2) My articles can range from 500 words to over 1,000. My competitors will break up the articles into very annoying pages which require multiple clicks to get further in an article. This also requires making sure all your links are correct on the top of the page so continuing pages are indexed (I guess they do multiple linking on a page, e.g. “Page 2 – How to Drive a BMW Fast On Open Highway” after just talking about doing so on a city street on page 1. Don’t know if this is somehow autogenerated or manually built with the hope it never changes. But with regard to how deep Google will spider a page and make content more or less relevant, keyword density, etc. is it not advisable to have so many words on a page? Better to split them up for page views? Could be a pain but would rather do so now than be sorry later.

Thanks for all in advance commenting.