If drupal is to serve as a true multi-user blog, it seems to me that there needs to be a way to create categories which have only an individual scope, not a group or global scope. So for example user A should be able to create categories A,B and C for his/her blog and those categories would be available for editing/adding only to User A and associated only with User A's blog. This is exactly one of the core features of wordpressmu and resultantly wordpress.com.
I've been trying to figure out some way to mimic this behavior in drupal using primarily the already-available modules. It seems one of the first hurtles would be developing a context-dependent menu system i.e. when user B is visiting user A's blog, user B should see user A's categories as a menu. When user B visits user C's blog, user B would see user C's categories as a menu.
The module "Book Manager" might be a way to fake some of this: with that module users can create individual books. But to me users are much more used to the system of categories in a blog than Drupal's concept of chapters in a book. Moreover, using books instead of Drupal's taxonomy module for this eliminates assistance from some other really nice modules, for example "Hierarchical Select."
I also had thought "Taxonomy Access Control" and "Taxonomy Access Control Lite" might offer some help. Basically the idea was to create one hierarchical vocab where the admin would create on the root level each user as a sep category. Then each user would be given permission to edit only their level of the global taxonomy. That might have worked except that "Taxonomy Access Control" and "Taxonomy Access Control Lite" don't understand the hierarchy so as users create categories within their category, the modules don't know to allow them access to their categories. There might be a way around this with "taxonomy other" except that I am pretty committed to the "hierarchical select" module and the two modules don't play well together.
All this to say: I've been playing around for awhile now with trying to build a site that supports individual categories within a multi-blogging environment in Drupal. I'm coming up dry. Any ideas?