That's indeed good news! Maybe that will lure more developers in, now that this has been turned into an actual incentive...

On the category question, as far as I remember the "official" categorisation has been that the Desktop category was all about the 4 home screens and the top bar - so everything else messing with the device itself would file under System & Utilities.

Oh, btw - won't be able to start on my game in time. There's a pile of requests for ApMeFo I want to work on as soon as possible, so that's what most of my spare time will vanish into.