Your version is very old and no longer supported. Moreover, you failed to
provide which mode of Outlook 2000 you are using.
Mail merges are a function of Word, not Outlook. Mail merges from Word
cannot be sorted by category. With modern versions one would use Outlook to
sort the Contacts by category first, then start the merge to Word from
Outlook using the Contacts you selected (Contacts Folder > Tools > Mail
Merge). If have no such option in Outlook 2000, then you would have to
create a separate Contacts subfolder containing only the Contacts in the
category to which you want to merge, then perform the merge from Word to
that Contacts subfolder.