When you create and save a new note, it is actually stored as a text file in a Folder (a category) in the EZNote Folder (which is kept in the System Folder). Categories are actually Folders kept within the EZNote Folder. To remove a category, you can just drag the category folder to the trash.
If you wish to keep some notes in a folder that is not stored in your System Folder, you can do this easily. Just create an alias of the folder you wish to keep notes in and drop the alias of the folder into the EZNote Folder (which is in the System Folder). The name of the alias will now be displayed (in an italic font) in the Category popup menu when you are creating/editing a note with EZNote!
NOTE: If you’d like to store all of your EZNote files somewhere other than the system folder you can. Just create a folder anywhere on your hard drive and create an alias of the folder. Name the alias “EZNote Folder” and drop the alias into the System folder, that’s it.