I already made this suggestion a few months ago and found several other members talking about this in the forums.
Have you considered the opportunity to build the structure of the Blogs Directory based on the Blog Types categories? A member shared a solution for this last year... Couldn't you integrate his code into your plugin?
May we expect something like this in 2011?
At the same time it would be nice if we could choose not to display into this public directory the blogs/sites that are set to "private". Actually this would be necessary because of this (WP registration form):
Allow my site to appear in search engines like Google, Technorati, and in PUBLIC LISTINGS AROUND THIS NETWORK.
Yes / No
Thank you for your feedback and have a nice week!
Edit: Sorry, I wanted to post this in the "Feature Suggestions & Feedback" forum