Not sure how versed you are in PHP, but could you take the function for "Moving Products" (from within the Admin by clicking on "M" icon to the right of a product) and then incorporate that into the script that checks to see if the item is sold out (thus placing the "sold out" icon by it). In effect you could possibly "move" the product automatically that way.
A few thoughts though.
1) What happens when the product is "back in stock"? Aren't you going to have to move it back to the category it came from? Wouldn't that be as much if not more work than just leaving it where it is? It looks like you are going to have to do the work of moving it anyhow aren't you?
2) Why would you even create a "sold out" category? If users can't buy the products anyhow, then I personally wouldn't include them on the site (unless you restock inventory pretty quickly). Including them on the site only gives the visitor more opportunity to "click away from" items that they CAN buy! Giving a visitor too many choices will almost always result in decreases in conversion (lost sales). A single category dedicated to items that users can't buy anyhow to me makes no sense?
3) To circumvent the sold out items being at the top of the listings, and to avoid the need to PHP code, as an alternative, couldn't you just sort them to the bottom of the category they are in? That way users wouldn't have to scroll through them.
My 2 cents. Hope it helps. :)



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