I'm working on one of our latest plugins, Blog Categories. It is getting close and wanted to offer a chance to beta test this on you your own WordPress Multisite installation.
Description section by section
This section lets you select where the Blog Categories output listing will be displayed. This works similar to the Settings > Reading option on a normal site. Here is an example of the landing page output http://screencast.com/t/cUTXuZP90vq
Blog Categories Display Options:
This section handles options for the presentation of the Blog Categories on the Landing page. In this section the admin has the ability to control the display ordering, number of items and category icon and size if provided.
Blog Display Options:
On the Landing page the Blog Categories is front page of the listing. From there the user can click on a Blog Category link. The URL will have the category slug appended and a list of blogs within that category will be presented. Also, in this section you can control the ordering, number of items, and the option to display the Blog Avatar and size. Here is an example of the Blogs listed within the Category 'Elementary School' http://screencast.com/t/ZqBiiwaRQr
This section lets you select a default category. Set the number of categories a Blog can be assigned. As well as Add/Edit/Delete existing Blog Categories.
Similar to the Network Admin area there are two widget the blog admin can setup to present the list of Blog Categories as well as Blogs within a selected Category.
Here is the interface for the Blog Categories Widget. http://screencast.com/t/fB1vbv24n8a
Here is the interface for the Blog within a Category widget. http://screencast.com/t/f8TTQeasA
And here is a front-end screen showing the output of the two widgets. http://screencast.com/t/iotGKbWN6zp9
At the Blog level there is a section added to the Settings > General page where the admin can set the Blog Categories associate with the blog. http://screencast.com/t/wVnyWyffb
On the Blog signup form we have added the same Blog Category dropdowns http://screencast.com/t/MiTwknjDlen
Finally, here is a link to download the beta version: http://dl.dropbox.com/u/2616987/WPMUDev/blog-categories-beta4.zip
Looking forward to your feedback