Work is steadily progressing. I havent uploaded anything into CVS for two reasons. 1: I havn't gotten the hang of it yet. 2: Many files are being replaced (for instance, all the *.ihtml files are being split into template files and php files) so I dont want to put them in CVS only to delete them later.
I've converted many files into templates using phplib. I have considered using a more advanced templating solution like Smarty but for now I'm sticking with phplib.
I have implemented multiple categories for products, allowing one to select multiples in the product admin. There is also a new flag that indicates which category is the primary one, making the other ones cross reference categories.
I haved added images to categories (looks like it was a planned feature as there were fields for it).
The navigation system is being revamped. There is a top navigation bar (generaly top level categories) and a side nav block. There will also be selectable blocks on both sides for various things (like a cart status block, sale items blocks, etc). Categories will have flags for not only being published, but to where (top nav, side nav, block, etc).
Currently working on the item attributes system. Trying to make it work better without drasticaly changing it.