Non-coder, here, but not lazy and I've ready everything I could on getting this going to no avail. So . . .
I've got wp2.7 going with the Tarski theme (which has it's own little admin area that does some stuff with categories, which may be the problem, I dunno) and I've installed My Catagories Order thus:
The taxonomy.php is in /wp-includes/ (but it was there already)
The "Categories" widget is replaced by MCO widget
and I'm getting MCO the admin drag and drop stuff to put the order in place, but when I do, it's not in order and there are no subcategories.
I dug around and *finally* found the wp_list_categories code at wp-includes/category-templates/php file, but there seemed to be a lot going on there and what I was exactly supposed to replace was a bit unclear, so I figured I better leave well enough alone.
Here is my website: http://www.herbalremedyforum.com anyway.
And just to echo the venting of other folks on here: yes, it does seem funny that organizing the categories (which is pretty darn basic to the info layout of the site!) isn't a priority :) oh well, thnks for the plugin and support -- now if I can just get the durn thing working!
Also, I've just tried to install the Magazine plug in and it doesn't seem to be working.