Themed categries? Anyone know how they work?

So, I upgraded my version of WordPress this morning to 2.9, and of course immediately played whaley trying to get it to work. Eventually, I figured out most of the problems, except for one, which might be addressed with an answer to this question.

The release notes say something about themed categories:

You can set custom theme directories, so a plugin can register a theme to be bundled with it or you can have multiple shared theme directories on your server.

and later

Specify category templates not just by ID, like before, but by slug, which will make it easier for theme developers to do custom things with categories — like post types!

This sounds like a method for themed categories to me, which I’d been using GYS Themed categories to create. Unfortunately, that plugin appears to make the editing window go whack, and I’ve had to disable it.

My question (finally!) is this: how the heck can I use this new information? I can’t seem to find anything about this in the Codex.