Converted from 2.5 to 2.6 broke sidebar setup

I converted from 2.5 to 2.6 last night. After the conversion I noticed my post categories don’t seem to show up any more and all of my pages show in the hierarchy (very bad). In 2.5 I was working from the basic “Classic” theme I had made a couple of small modifications to the sidebar.

In 2.5 sidebar.php contained the line:
<li id=”categories”><?php _e(‘Categories:’); ?>

<?php wp_list_cats(); ?>

In 2.6 I see:
<?php wp_list_categories(‘title_li=’ . __(‘Categories:’)); ?>

and also above that the comment:
<?php /* Widgetized sidebar, if you have the plugin installed. */
if ( !function_exists(‘dynamic_sidebar’) || !dynamic_sidebar() ) : ?>

I don’t really understand the syntax in the 2.6 or more importantly why none of my categories show up.

Next in version 2.5 I had made the following modification:
Instead of <wp_list_pages(); ?>
I had <?php wp_list_pages(‘exclude=2524’); ?>

2524 was the id for a page I created to be outside the hierarchy. Any page I didn’t want to show under my list of pages I simply made a child of that page.

Is there a clean and simple way to do the equivalent of this in 2.6?
I see the line:
<?php wp_list_pages(‘title_li=’ . __(‘Pages:’)); ?>
but I don’t know how to modify that line to exclude and particular page id or even if that is still the proper way to do this.

Please advise. Any assistance would be greatly appreciated.