Especially after last weekend’s PR update I think it could become a great strategy since I have seen many tag-slugs end up in the supplemental index (no worries, I know it’s not bad and don’t bother too much with the HELL part of it).
When following that strategy I think it is a good way to improve the value of 8-12 (depending on the number of categories) keywords.

But yes, I agree… starting with categoryslug from day 1 might bring problems in the long run.

I have been writing a lot of articles on the same topic and when I categorize them I then use the category url as a link into my blog from other sites. For example, I have written a dozen or more articles on Voice Recognition and use that category to send people to my site utilizing the flagship content concept aimed at the category level.

This also brings people into the site pre-funneled on the topic they were originally interested in and they do not need to go looking through my infinitely long list of categories (ok the long list kind of sucks, but no one is perfect). The point is you can go into the site and read 12 articles in succession on voice recognition. or similarly through the other categories.

Fortunately, it’s a new blog and only had 8 posts. But imagine if it had hundreds. Of course, had I done a nightly/weekly backup, maybe it wouldn’t be an issue. Still, i’m never using category slugs again.

If I’d known this at the start, I would never have used the categories to form the URL. Bad idea unless you’re prepared to set your categories in stone.

Regardless, the technique to hide can be used to illuminate as well, hence I signed up as an Illuminati initiate. (just kidding or am I?).

Truth be told I agree with you there is a lot of bang for the buck in promotion of deep links. There’s a lot of ‘logic’ in it from Google’s perspective, because for your average website , not talking blogs here, the front page rarely has the information you are looking for. The good stuff is on the inside typically. So a strong deep link is probably where the surfer / reader wants to go anyway. Therefore, it makes a lot of sense to pay attention to your deep pages and what you are doing with them.

I for one am currently orchestrating a lot of movement in this area right now. . .

One thing I often also notice is that people have too many internal links on their home page (or site wide even). This can in my experience lower the amount level of directly inherited domain PR juice. But if applied correctly every permanent link in fe. the sidebar will inherit [domain] PR-1.
Usually I link on the main page to the articles I really want to pimp out (best of) and most read ones (keep the traffic coming).

Another idea, to strengthen the power of keywords, is to use the category name in the slug. This is much better SEO than to use the date (standard) permalink structure such as the case is with WP. Use in WP /%category%/%postname%/ to obtain that structure. A simple plugin takes care of redirecting your old links to the new structure, and that without losing juice.
Inconvenience with this strategy is that it isn’t too smart to assign entries two or more categories, but isn’t that what we have tags for?

I’ve gotten several of these already.