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I think that using tags would work best for you. If you allow people to create unlimited subcategories your category list on the right side will become ridiculously large over time. If you just allow for tagging, something we are looking into, you will in a way get the same functionality of a subcategory without the complications. We need someone who wants to take on the vogoo project and help us integrate vogoo with pligg. I'll post this request somewhere else.
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