Use taxonomy (categories) to create categories for your products and assign them to those categories. Then you can use the Views module to create views of products by category.
What I'm getting is a series of pull down lists (under product admin) corresponding to the categories I created though they all say "None selected".
Sounds like you need to read up on drupal.org about what Taxonomy is and how to use it--it is a bit complicated at first to grasp. You must assign a term to each product by selecting one from the dropdown. Then you can use the Views module (which you must upload and install) to create Views based on taxonomy terms. Read the docs on Views also as it is a complex module.
Ok, I partly have this working now - except it is displaying my list about 12 times! I only want the list displayed once.