Removing Categories from Permalinks - can it hurt ranking?

Hi all,
I am thinking of doing a permalink change on my website and am wondering what my best course of action would be.

Right now, my posts have links such as http://domain.com/keyword1-keyword2/...word2-keyword3 (domain/category/postname).

Someone once told me that having part of the keyword in the category was a good thing SEO wise, but i'm not seeing too many people doing that. The problem i'm having is that I can't link my posts through related records as none of the categories match (keyword 1, keyword 2 actually matches a person's name).

My plan is to actually link these names using common categories, but update my permalinks structure to only include the postname. This would allow my Related Records section to become automatically updated based on category.

I am wondering the following things:

1 - If I change my permalinks to only be domain/postname instead of domain/category/post-name, will this hurt my ranking in the SERPs?

2 - Should I update my htaccess page for each of these changes, or just let Google figure it out over the next month or so.

Thanks!