Originally Posted by Jdoughs

The reason you noindex categories is to stop the flow of content and not let it appear on too many pages. Noindex is used to stop the spider from picking up duplicate issues.

If you have enough content to fill lots of categories, then its very safe (and effective) to use the category AND tag layout.

Basically, if you have enough content to warrant using categories also then by all means do so.

Also, if you are going to have tons of pages (like the other scenario) you might as well categorize them (if lots of themes/niches/etc) this type of approach will create MANY extra pages as you sort relevant excerpts of information (posts) and they get shown on category pages. (as long as there is enough content these pages will be fine using post exertps, also category description function to add unique category text.