This Joomla 1.6 video shows how sections and categories have been combined into a single category tree. In addition to this, there is no limit to the depth of categories you can define.

For more information see theartofjoomla.com/home/36-quick-look/96-joomla-16-quick-look-categories.html

Provided under creativecommons.org/licenses/by-nc/3.0