Category issue with Sidebar plugin

I have a standard sidebar on the whole site that should include a few ads that are category-specific. When I add such an item I can't select the "category" it should apply to. The option to select a position only shows up when the WPMU plugin is activated, so it's not available in the standard sidebar setup. When WPMY plugin is activated it shows up, but it doesn't work.
Here's a short video so you can see what I mean:

Any idea how to solve this?

Tx & rgds - Chris