Where are the Categories?

I have just bought upgraded from Windows XP to Windows 7 andthere something in the new Outlook which is very, very basic but I can’t find it in Windows 7: Categories.
In Windows XP Category is a button on the bottom right of a contact, task etc where you assign one or more categories to a contact, task or appointment (unlike colour category which assigns a single colour per item). For example I might tag contacts as ‘category’ plumber, people to send a xmas Card to, skiers etc so when I want a plumber I look just at those contacts that are plumbers. A contact might be a plumber, skier and who I send a Xmas card to. On my Mobile phone like Windows XP, I just assign categories from a self-defined list by ticking which ever categories I want to assign to an item.
When I search Windows help on categories it just mentions colour category I cant find how to add ordinary categories to tasks, contacts or appointments.
My transferred from XP contacts, tasks & appointments already have Categories assigned and when I list them I can “arrange by category” and by right click it allows me to expand or collapse all categories- therefore Windows 7 does recognize categories. But where do I add categories in the first place in Windows 7?
In tasks or appointments I cannot find them at all. In contacts> view all fields> view “frequently used fields”, I can see categories that I have added but it should list existing defined categories that I can choose from (plus option to create new categories) and I tick what I want. I need to see a list and select appropriate categories its no good trying to remember all the Categories I have already created and try to write them down exactly without any spelling errors Categories are fundamental to daily use of everything stored in outlook but I can’t see how to add them to new items I create, I must be missing something really obvious, do you know how I do this?