The RSS problem is fixed by the fix at Joomla.org under the heading "1.7.0 Syndication module broken" at
docs.joomla.org/1.7.0_Syndication_module_broken
But it took a while for me to recognize it needed fixing. I used the beez2 template and it is certainly better than milky-way but the spacing between lines in several places was too high for my liking, tables did not respect "cellpadding" so I used a class, and custom html modules were even more awkward with these issues. I also could not make the page class suffix work. However, overall I am pleased with the end result. 1.7 has a number of benefits that are small yet add-up to better usability.
Maybe the category issue was just with my particular situation - the biggest way it shows up is in Google. Old Google links go to non-existent pages even though I'm not using SEO optimization just like previosuly. I was going to use SEO optimization on the new site but found that when it was implemented, old links to local video files did not work. This meant embedded You-Tube videos worked and images worked but not flv videos. Strange. This was fixed by disabling SEO optimization. I possibly could also have fixed it by re-inserting the hundred or so videos.
I trust this info helps others.