directory plugin - can't check categories under a listing

When creating a new listing (or editing an old one) I cannot select a category.

I want to create a directory for people to post activities by state. Ideally, they create a new listing, see the "state" field with the categories "alabama, alaska, arkansas" etc., select their state and save.

Except I can't select a state. They're present, but the check box feature is not working.

Any ideas about what could be wrong? I have the latest directory plugin. (1.7 I think).

You can login here to check out my sandbox site:

Try logging in as
user name: elizabeth
password: wpmu

then try adding a listing and choosing a category.

I cannot do it. I have this integrated with membership. I wonder if an extra step is needed with permission?