1) No, and this is no change from the way earlier versions operated. If you want to send a message to a group of people by category, you have two ways to do it -- perform a mail merge with Word, preferably starting from Outlook, or use the By Category view to select all the contacts in a category and either drag them, as you describe, or use the Actions | New Message command.
2) Cool idea! Why don't you repost as a suggestion?

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Sue Mosher, Outlook MVP
Author of Configuring Microsoft Outlook 2003
http://www.turtleflock.com/olconfig/index.htm
and Microsoft Outlook Programming - Jumpstart for
Administrators, Power Users, and Developers
http://www.outlookcode.com/jumpstart.aspx
> In outlook 2007 they have a newish contacts groups system based on color
> codes which you can rename and change etc.
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> The first issue is a lot more important to me than the second one (As the
> second one is pureley for aesthetical reasons) any help would be appreciated.