Permalinks and page titles question

Hi there,

I've got my site live here, site link, and before I set to creating the next level of multi-user blogs there a are couple of things that I don't understand how to sort. Sorry if I don't use the right terminology to explain the pages - but I'll try to make it clear in the explaination.

Firstly...
I've got permalinks set as /%category%/%postname%/ - and this is working great when I drill through to the full blog page - but on a category list page ie here it is showing as '...blog/category/...'

Any ideas how to change the Permalinks so that it looks consistent on the listings page?

Secondly... I've installed Greg's HP SEO and it works fine appart from in the title area, which doesn;t show anything except for the blogname / page title.
In the header.php there is the following code:

<title><br />
			<?php<br />
			if($bp_existed == 'true') { ?><br />
			<?php bp_page_title() ?><br />
			<?php } else { ?><br />
				<?php wp_title(''); ?><?php if(wp_title('', false)) { echo ' :'; } ?> <?php bloginfo('name'); ?><br />
			<?php } ?><br />
		</title><br />
			<?php do_action( 'bp_head' ) ?>

...and I assume this is overriding the set-up for the SEO title area.
Is there something that I should replace or put into the header to make the plugin create the page title?

Many thanks as usual for your help. You guys are just stars.