Yes, I don't know enough about how to make the urls spit out the category names but if you read the article I mentioned in my earlier reply, it says that the way the URLs show now as numbers works well as they are clean and easy to spider...
from
http://www.stargeek.com/php-seo.php
QUOTE:
...A major goal in SEO'ing your PHP pages, is to make them look and act like static pages. If you have a large site you can use Apache to fake static looking URLs...One of the major problems most webmasters have with getting their dynamic pages to index is URL cleanliness... a great advantage to using dynamic pages as opposed to static pages is the ability to create content that is constantly changing and updated in real time...randomly circulating content and other automatically ?fresh? content can boost your ranks in Google, and many other engines. Another advantage to using PHP is that you can make simple modifications to many scripts to create relevant and fresh page titles. Since this is the most important on page factor in SEO special attention should be given to creating title tags that accurately reflect the page?s current content.
As far as the code, it is pretty much customized for my site, maybe it needs more tweeking??