Outlook 2007’s category picker leaves a lot to be desired for people who make heavy use of categories and prefer typing categories in the category field text box.

Messages have a category text box in Message options. Right click on the message in the message list and choose Message options. Or on an open message, expand the Options dialog – click on the little arrow in the lower right in the Options chunk where the Color Categories button is.

For Contacts, click the All Fields button. Categories is under the Frequently Used fields and you can type in the value column. (Most fields are editable in this view.)

See Microsoft Outlook Categories for utilities that may make it easier to apply categories to other item types.
http://www.slipstick.com/outlook/olcat.asp