That, sir, did the trick. Thank you very much!
One thing users will need to keep in mind-
The main settings file types MUST BE KEPT and MATCH what you put in the category file types (only once overall though, ie I put mpg into the master list, and have two categories that can upload mpg. I do not need to add mpg twice to the master list).
The reason is so they will show up. If you remove the file type from the main settings, then it shows the file cannot be found, so leave the "master" list intact with what types you want to allow. Much easier this way than to try and re-code the entire 4images script
This categories thing DOES make it so only certain types can be uploaded into certain categories though, which is EXCELLENT! You can leave a TOP category blank, and have the sub-cats upload certain types of files.
Example: I have a top category named "Videos". Since I do not want any files uploaded to the top category, I can leave the file types blank for that category. I then have two sub-cats (SciFi videos and Music videos) under that top category. I set each of them for different file types, and those two categories will upload only what I set it for.