The Category module has received much praise, and there may be a tendency to replace Drupal's taxonomy with Category. On the surface, it doesn't seem to hurt, because the Category module seems to be a generalization of the taxonomy module. That is, if you don't want the additional features provided by Category simply disable them.
I've followed discussions (example: this thread) related to taxonomy and Category for a while now. Last night I installed the Category module and played around with it. Everything went well. It's an impressive module and I admired the author for taking on this task. But ..... if people want to replace Drupal's taxonomy with Category, I think it'd be a mistake. The current taxonomy module needs much improvement to take it to the next level, but ... replacing it with category is not the right thing to do.
I'm writing not to criticize Category but to hope people will improve the current taxonomy and take it to the next level.
Essentially, we are talking about three main things: static content (e.g. book pages, "about us" type of pages), dynamic content (stories, forum topics,) and taxonomy.
Taxonomy is not exactly static or dynamic content and it would be a mistake to generalize these three things and give users the option not to use them. 99% of C++ programmers do not know the existence of the "throw clause". Why? it's optional, and nobody uses it. Java requires the "throws" clause and it is a great thing. Making things optional can be very dangerous. Taxonomy terms don't really need all the types of treatment that a node/content needs. For example, "comments", etc. I feel that in a long run these things can create loopholes and artifacts on taxonomy that are not pleasant at all.