Missing category option after upgrading to 2.8

Hi, I used Premium News Themes from WooThemes. When I use WP 2.7.1, I can select a category for featured category displeayed in front page. After upgrading to WP 2.8 suddenly there is no option on Category dropwown menu. Can anyone help me with this? I also tried another theme having the featured category for the frontpage and no luck for me.

regards,
Duratia