Is there a default CMS Block that I should be using for a new category? I'm not quite sure what I should be selecting here.
I do notice that when I set display mode to BOTH, the category does not show up in the menu on the main page....
The other thing I noticed is that when I select an image with the category it doesn't seem to upload the image....
It depends what your trying to display on the category.
If you choose "Display products" it will show products assigned to that category.
If you choose "Display static block" it will display a static block of your choice.
If you choose both, it will display both.
What is it you are trying to display on the category page?
Eventually it will be some text and then the product images, information.
I was getting this from the user guide.
This can be done withour using a cms static block.
CMS static blocks is use for easier maintenance in Magento. You will be able to use the same static block over and over again troughout your store, and only creating the static block once.
For Categories, the standard is image, description, meta title and meta description.