To use categories, you must first set up your categories. To do this, click on Queue, then click on Categories.
Once in the Categories screen, you will be allowed to set your categories, their names, and their color. You have an option of selecting a custom color if you so desire.
You also have the option to set an automatic default schedule for the category that you're setting up. This is just the default, and can be changed anytime you would like. You can also set schedules for your Category by clicking on the Schedule tab.