The Palm is limited to 15 categories. DayLite can have unlimited categories. On top of that categories in DayLite can be multi-purpose (i.e. the 'Personal' category can be activated for Contacts and for Tasks).

So in order to synchronize categories, you have to do 2 things:

1. Enable Category Synchronization in DayLite's Palm Preferences
2. Ensure that the categories you care about are on the Palm (If DayLite detects a category on the Palm that does not exist in DayLite, the category will be created in DayLite during the sync operation)

If a category is not found on the Palm, then DayLite's conduit puts the item (Task, Contact, Memo) in the 'Unfiled' category.

NOTE: Categories on Appointments are not synchronized at this time.