One limitation of WordPress (including WordPress 3.01) when using the “%category%” permalink syntax is that you can’t choose which specific category you’d like to use for a post when a post belongs to multiple categories. For example, this post could be assigned to a “WordPress” category as well as a “Productivity” parent category. By default, WordPress assigns the category with the lowest ID database value. To resolve this, there is a handy little WordPress plugin called “Hikari Category Permalink”. Here’s the download link:
It is based upon the “sCategory” plugin. You don’t need to change your permalink structure (still use %category%) but now when you post/edit a post, a little hover ‘permalink’ link will appear over the categories. Simply click that hover link and that category will be used!