I think I figured it out. In addition to adding the category.txt file, add a subfolder for each category to the /photos directory. Seems to be working.

doesn't work with me :( *cry*

i didn't need the category.txt file. i just created a folder "photos" that has several subfolders. the name of the subfolder is the categoryname.
if you want to have a photo in more than one category, just place the image in every subfolder it should belong to (or you make it in the post-site).

@Donald,
as nick describes the behavior of a category (getting its name from the folder) i'd like to suggest a different behavior of the categories for the final release:
i've seen it on another photogallery-script (which has not that much comfort and features as folderblog :-)) from juxtadesign.com (off-2 months...?!), but it creates a list of categories giving the list-item its name from echoing a slightly modified name of the folder itself. If you could adopt this behavior, creating category.txt-files would be unnecessary...
For example: when the folders names is "Vacation_not_Holidays_2003" it would display Vacation not Holiday ...
in my opinion, that was even more intuitive.
would be nice if you take a look at it (download_here) and tell if thats possible...

or is that som sort of "extensions-folder-case" and i have to write on my own? donno if that was possible to include then...
btw: it has also been released on the zend code-gallery, so there ought to be no copyright issue with that...

another two ideas on template-handling that comes into mind:
folderblogs root would stay cleaner if templates would be placed within subdirectories by default (main reason for asking is that when mine is finished it will contain not only the php-files, but css, one javascript, background-images, ...) so when having two or three templates installed you'll have dozens of files in there...
the 2nd would be (ok, maybe i get this together on my own) to have an additional parameter that would tell fb which template to use (e.g. fb.php/classic/) for on-the-fly template-changing...(what could substitute or override the $template_name in fb_vars) btw: i have to apologize for requesting this as i didnt have a closer look if i can do it on my own, it's just an idea and i swear i'll try to get this working as soon i find time. i'll let you know...

@All,
any opinions on these?

o.0

Didn't quite follow Erik's idea on categories, but personally I'd like to be able to just create and/or delete categories from the post interface, rather than having to mess with folders and category.txt files myslef. I'm always chaning my mind on which categories to use, and it would be cool if it were that much more convenient to change them around. It is working fine as is, however.

maybe a combination of Kevins idea and mine?
btw:
cant the chmod of folders be done also "automatically"?
eg:
<?php
chmod('thumbs', 4777);
?>
greets, and keep up the superb work!

Thanks for your suggestions, Kevin and erik.

I'll definitely take both of your category suggestions into account (being able to create categories via post.php, and a better naming system for categories).

erik, I experimented with chmod'ing the directories in a much early fb version but ran into a lot of security snags. I'll see about re-adding it with some error handling (so it chmods the directories if your server allows it, and otherwise does nothing).

Oh, and have you tried just setting $template_name to "subdir/template"? I'm not positive it would work off the top of my head, but it's worth checking out.

i'm sure it would, just been thinking about a "cleaner, more clear standard" in template-designing, what was inevitable when wanting to change templates on the fly...

^

I've this running nicely. I was thinking of using the categories concept to segment the photos by date. I typically post images 3-4 times per month and would like to use DDMMYY-Topic as the category name. Is there a reason why this would not work in FB3?

As an example, is there a hard limit on the number of folders, space for their names, or other?

Nope, no limit on categories/category names.