Create new category - Missing??

I want to create new categories, i know i should have the option to do this under

"admin -> catalog -> categories/products

Click on the New Category button and create your category."

but it just isn't there, i think i may have tweaked a setting and disabled it as i get this message on the categories/products page at the bottom:

WARNING: You have Products in the Top Level Category. This will cause pricing to not work properly in the Catalog. Products found: 10

and when creating new products i don't have any options to select what category they go to, can anyone help me?

you have created product in top level .. as result you cant create categories ..

If this is a new install ... and you only have 1 product ... delete the 1 product ...

Now, make your Category ... and add your product to that category ...

Or set the product status to disabled and catagories can be created again

If this works, you then need to move the products into your new categories; they should not be left at the top.

I disabled all of my products (about 10 of them) yet it didn't work, as i was almost done deleting them i got the option to create a new category.

I was worried i had to do something more drastic, thanks for the help guys.