You can delete categories as long as a) they are not default categories, and b) they do not have products and services currently assigned to them.
Delete a category as follows:
- If you are not already on the User Screen, click on the 'User Screen' hyperlink on the top navigation bar.
- Go to Products / Categories
- Click on the '[X]' hyperlink to the right of the doomed category. (You will be asked to confirm the deletion.) Done.