Movable Type 4 features an improved user interface for adding and removing categories from an individual entry. The system also makes it easy to assign a category as the primary category for the entry.
Assigning a category or multiple categories to an entry
- To assign a category to an entry, locate and click on the "Add Category" link in the Metadata section of the new or edit entry screen.

- This will bring up a small window that displays the categories for your blog. To add a category to the entry, simply click on the checkbox next to the category name. When you are finished adding categories to your entry, click the OK link at the bottom of the small category window.

- From this window you can also add a new category to your blog. To add a new top level category, simply click on the "Add New" link. This will open up a field where you can type the new category name. To save and apply that new category to your entry, click on the green "plus" icon.

- From this window you can also add a new subcategory to your blog. To add a new subcategory, place your mouse cursor over the category under which you would like to create a new subcategory. Click on the green "plus" icon that the system displays. This will open up a field where you can type the new subcategory name. To save and apply that new subcategory to your entry, click on the green "plus" icon.

Setting a category as your primary category
By default, Movable Type will assign the first category you click on as the entry's primary category. However, it's easy to change that assignment.
- To assign a different category as your primary category, locate and click on the category name. The system will automatically make that category the entry's primary category.

Removing a category from an entry
- To remove a category from your entry, locate the category you wish to remove and click on the red "x" icon to the right of the category name. This will remove the category from your entry.

Note: Changes to your categories will not take effect until you save your entry.
1 User Contributed Notes
One vital bit of information seems to be missing (isn't it always the way!) - how to remove unwanted categories from the category list.
Lets say you have created a category 'Places' and chose it for one of your Blog entries. You then decide that 'Places' isn't suitable, after all. You can remove the category from your Blog entry OK, and choose a more suitable one, but the category 'Places' still appears in the 'Categories' list (with no entries next to it) in the right sidebar of your Blog.
If the problem with your category was a mis-spelling, this makes your Blog page look particularly silly!
There must be a way of deleting unwanted categories, surely ???