WordPress Tag Cloud and Category Not Working?
If you installed the latest version of WordPress 2.6.2 and noticed that the tag cloud and category feature both aren’t working, you aren’t alone.
This is a bug with WordPress. If you try to use the Permalink section it will messy up the tag and category section of WordPress.
The only way to get have the Tag and Category to work with this version of WordPress is to deactivate all the plugins and set the Permalink back to the original settings. Also, you will need to add the word ‘category’ and ‘tag’ to the Category and Tag textbox.
So far I am still waiting for a solution from WordPress and hopefully they have a fix for this bug.