Hi,
I’m experiencing a similar problem with WordPress 2.2. I cannot add a category without doing it directly in the underlying MySQL database.
I have tried the method advocated by jzmills but nothing changes.
When I try to add a category using the Manage => Categories option (ie. Add a ‘Category name’ then select ‘Add Category>’ the screen display messes up (the text elements at the top of the screen centre and change to a serif font and a screenshot of the blog front page appear below the text) but the category does not appear.
A category cannot be added on the Write => Posts page either.
I’ve also tried to create posts with patchy success but after another complete clean install posts can now be made.
I took jzmills advice concerning .htaccess but this has made no difference.
Any ideas?