I am a big user of Outlook’s Color Categories. Every Contact and Calendar I create has at least one category assigned to them. I find it much easier to work that way. If you are moving computers or exchange accounts, you will find that your categories will not move with you. However, there is a very easy to rebuild them.
Right click on the Inbox and go to Properties. You will have the option to Upgrade to Color Categories. If you click on this, Outlook will re add any category that has been used, rebuilding your master category list.