template hierarchy and urls

HI

Ive got a custom content type ( as is at moment ) – Categories.

I have another custom content type – Holidays

I am currently using categories to create a menu

The idea is.. A user selects a category and all the holidays in that category are listed… A user would then be able to select a Holiday and view in more detail.

MY problem is the urls and there after knowing how to develop my templates.

problem 1)

At the moment, when a user selects an option ( category ) , the url is /categories/{category name }

I want the url to be /{category name } and not include the content type name…

problem 2

Given that there can be any number of categories and holidays,

I then want to be able to click on a holiday to view in more detail but i require the url to be /{category name }/{holiday name}

Is there a way to do this?
Or
Is there an alternative solution that will enable me to generically create a template that executes depending on the number of slugs/query string parameters?

Any help would really be appreciated. Have been stressing on this all day.

Thanks in advance