Firstly, thanks for taking the time to show me how you created the category.
I did not realise that you had to create custom categories for them to appear in the calendar. I thought that all you had to do was to select one of the default categories already provided e.g. baby blogs, food blogs, city blogs. Would it not seem sensible to do this or am I misunderstanding the purpose of the calendar and it is to only show the creation of custom categories?
Okay here goes. I am still having problems. This is exactly what I do. Sorry about the size of the following images. You may have to scroll down a bit for the second image. I am in a rush.
Step 1
I am not logged in as a user. I am a visitor to the website socialathens.com. I select categories -> calendar:
Step 2
I select the "5 Categories" on August the 12th 2009 and it displays the "custom_category(1)":
Step 3
I get the following screen after selecting custom_category(1) which is not what I was expecting:
Step 4
I go to myphpadmin admin and verify that the blog is viewable by the public, which it is: