Unable to Apply Category; Posts Sometimes Do Not Show on Page

When I try to publish a post it hangs for a short time and then I get a blank
screen instead of coming back to the page. Initially the post would not
display on the front page of the blog but would be listed in the Dashboard and in the list of recent posts.

Regardless of what category I used, the post would be listed as uncategorized.

I tried deactivating all the plug ins. The posts now appear but remain uncategorized. I reactivated all the plugins and there is no change.

I haven’t added any new plugins or made any other changes, and the categories were working fine until now.

I’m still using WordPress 2.0.4 I’ve thought of trying to upgrade to see if that fixes the problem but am also concerned that installing a new version over one that has problems might also create further problems.