Functionality of this hack is ever changing. Allen asked for the ability to delete a category. The box telling you that you can not delete the cat until you move the links is purely a SECURITY measure on my part. I did not want people to accidently delete their cats that contained all their links which would mess them up.
You can move the links by selecting the green button on each link and changing its category. I have not coded up a mass move thing but it would be easy enough to do if enough people are interested.
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