I ended up creating the categories plugin myself and attaching it to the media library menu. Additionally, I installed WordPress 3.0 and MU to allow me to have 2 media libraries and load the files in two different locations. The first site (the base site) manages her CMS, and the frontend of the site, including files/images attatched to pages/posts. The second site manages the media files used for the member portal. WordPress media library is actually very nice and databases all files, however does not support categories for files, which is where my categories plugin I built came in.