In the context of the 100-ohm UTP (Unshielded Twisted Pair) type of cable used for Ethernet wiring the only categories of interest are Cat3, Cat4, Cat5, Cat5e, Cat6. CATx is an abbreviation for the category number that defines the performance of building telecommunications cabling as outlined by the Electronic Industries Association (EIA) standards. Some specifications for these categories are shown further down.
Up until the late 1980s thick or thin coaxial cable was typically used for 10-Mbps Ethernet networks, but around that time, UTP cabling became more commonly used because it was easier to install and less expensive. UTP CAT3 and CAT4 were used for a quite limited time since the emergence of 100Base-TX networks meant a quick shift to CAT5. By the year 2000, moves to gigabit (1000Base-TX) Ethernet LANs created a need for another specification, CAT5e. CAT5e is now being superseded by CAT6 cable.
If you're cabling a mission critical system or you want your network to be future proof, go for the CAT6 cables (and patch panels and connectors), but for the average home or small office network CAT5 or CAT5e will be just fine.
Crossover Cables vs Straight Through Cables
Ethernet patch cables can be wired in three different ways, the two main ways are called straight through and crossover. The third type is called rolled and has only specialized applications.
Generally speaking, straight through cables are used to patch between different types of equipment; for example, PCs to a hub.
Conversely, crossover cables are generally used to patch between similar types of equipment; a PC to another PC for example. Some modern hubs don't care if you use crossover cables or straight through cables, they work out what you're using and configure themselves accordingly.
As stated at the outset, the actual difference is in the wiring. Inside the UTP patch cable there are 8 physical wires although the network only uses 4 of them (the other 4 are simply wasted). The 8 wires are arranged in what's known as pairs and one pair is used to send information whilst the other pair is used to receive information.
On a PC, the pair on pins 1 and 2 of the connector send information, whilst the pair on pins 3 and 6 receive the information. To make PCs talk to each we therefore need to connect the send pair of one PC to the receive pair of the other PC (and vice-a-versa). That means we need a crossover cable. If we used a straight through cable the both be listening on the one pair - and hearing nothing, and sending on the one pair - achieving nothing.