Permalinks? or Not

Thanks in advance

Ok I installed WP 2.6 on my windows Wamp server. I then installed the plug in wp-directory for it. Everything goes smoothly… When I click any of the Categories in the directory I get a 404 error.. The url after 404 error is missing the the first =cat?-3 or whatever it is in the url after clicking on one of the Categories in the directory. Now if I go back to the main page where the main page where the directory is and click the Category name at the bottom of the post for the directory. it takes me to the same directory just filtering everything out that’s not in that particular posts category. If I click a category in the directory everything seems to work fine..

How can I get it to where when a person clicks a category in the main directory it adds the category name in the url for the main catogory. If that makes any sense…

I know permalinks are messed up in 2.6 but I don’t know if this is what it effected