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http://www.seomoz.org/blog/seo-link-directory-best-practices This blog post has some link directory best practices as well.

Thanks for your help! Thats great!

If every single product page is linking to a category page, I am sure that Google will discount these links some what. I think linking from articles and good quality content to the category pages will have some positive effect, but like others have mentioned don't spend too long working on this as the total benefit will not be huge.

When Google finds more than one document (ie URL) with the same content, it has to define which of them is the representative document of the cluster. In doing this it looks at inbound link metrics, essentially, plus date of the page, pagerank and other factors. In this decision, it can be wrong, indexing a page that can hurt you indexation (consider this situation: it indexes as representative document page 2 of a listing page in descending order: new items in this category end to be at page 2 or later and are less likely to be discovered). The canonical tag can be a good solution, even if it is a hint and not a rule to Google...