@amig Correct, the version of the site that is currently hosted by hostgator does not have the problem. I used a plugin called “wordpress duplicator” to move the site on to a local installation of XAMPP on a windows 7 machine and categories on that site no longer work. One other plugin, better WP-security broke in a fairly major way but that’s another story, I doubt it affected the FWP plugin.
Now I also created a second local wordpress install to demo a new theme for the site, and installed everything fresh, including FWP. Categories and tags work fine on this site at the moment. I’m not very well versed in php/mysql, only enough to use other people’s code and tinker a bit, and I’m also new to wordpress as a backend, but I’ll try looking a little closer to see if I can find any discrepancies.