silvermountain, lets prioritize tasks that should be done for Telescope. What is the problem #1? #2?
Portrait mode and adding buttons for categories is heavily
connected, because both are having to do with reimplementation of onscreen drawing.

By the way, how many categories do you have in your menu? I think if we implement category buttons with labels (as on Kroll's mockup), buttons will be somewhat small and labels could be truncated. Not very nice.
May be more convient would be two-level icons menu, like with Catorize on Maemo5. I mean when you open launcher, it will display the menu with icons like we have it now, but each icon will represent one category, and after you tap one of them, it opens second-level menu with app icons from this category. Will it be more convenient? Or you don't have many categories and buttons at bottom would be better?