Importing "Moodle XML" format files
You can insert a special dummy question into the XML file to specify the category path into which the following questions will be inserted. If the category or categories do not exist they will be created. Note that the from file: option must be ticked on the option page or this code will be ignored completely. You can switch categories in the xml file as often as you wish.
An example of the format is as follows:
<question type="category"> <category> tom/dick/harry </category> </question>