I upgraded from version 2.1 to 2.6 today and everything went perfectly, that is until I checked my posts and noticed that all the categories were blank/empty!
Just thought I'd share how I got round it so that others can resolve the issue without stress.
Obviously before I began the upgrade I had done an export of all posts, pages, comments and categories. Also taken a database backup and followed the rest of the instructions on the upgrade page.
Once I had upgraded and had the problem I had to do the following to restore my categories:
1. Set up a test wordpress site with a clean 2.6 install (make sure you install to a new dbase!!).
2. Import your wordpress posts, pages, comments, categories xml file that you exported earlier before the upgrade.
3. Check that the new wordpress site contains your categories.
4. open up php my admin (or use your prefered method to access MySQL) and navigate to the new site database.
5. select the wp_terms table then click on export, leave SQL selected then press the go button.
6. You are presented with a sql script. Copy just the section which has the "INSERT INTO" rows.
7. Switch to your recently upgraded database and locate the wp_terms table.
8. choose to empty the table.
9. click on the sql tab for the table, then paste your text from step 6 and click on Go.
10. You now have a table complete with your categories and the original ID's!
This method means you retain the original links between posts and categories and obviously saves you having to laboriously go through adding new tags and reassigning them to posts.
I hope this post can help others in a similar predicament.