category -> subcategory ->subsubcategory system

[eluser]jedd[/eluser]
Have a read of [url="/forums/viewthread/137031/"]this thread[/url].

Summary - you don't need all the parent categories to be present in the URL in order to identify the given sub(sub...)category. Or, if you prefer, the item's location in the hierarchy.

EDIT: - scratch that earlier thread reference - I went hunting for a recent thread that was similar to this one. I can't find the actual thread, and annoyingly can't remember who I was talking to about it, but the summary stands (which kind of answers your two questions, too