unable to create categories

I am having major problems setting up categories, when I did create them they would not show, so I have all the products in a root category, but now I cant create any categories at all :(

Please assist

Categories hold Products or Categories but not both ...

Because you have Products in your Top Level ... it is blocking you from adding Categories ...

Look at your database tables via phpMyAdmin and see if you have anything in the tables:
categories
categories_description

OK thank you, is ther ea quick way to fix it. e.g. create a cat in the databse and move everything into it, then create the full set of cats and sort the mess out ?

That is why I am asking if you have anything in the tables for:
categories
categories_description

If so, what is the last categories_id value that you see?