What you're wanting is pretty much automatic behavior from WordPress.

When a category is called, WP is coded to look for a template with the category name or number in it and use that to display.

Say you have a category 'snakes' and its ID is 18. You have a special template for that cat. Name the template 'category-snakes.php' or 'category-18.php'. WP will find and use that template file to display the category posts.

Does that answer your question?

Post appear al on one page on the "Post page". You can change this to show just 1 post a t a time if you want to.

Each post has it's own individual, stand alone url.

Each post is associated to a category, and each category has it's own individual page.

All that is automatically inside WP. No plugin needed.

I have found that may of the themes that you purchase will have options built into them which will allow you to set the number of posts per page. My all time favorite is the Heatmap Theme. Stuart Wider the developer of this site is great. It is very cheap and he is a great resource. Plus the site is already optimized for adsense, and other affiliate ads.

If you currently have ALL your posts to go to just one category, then yes, they will all be on that one category page. You have to set up the different categories and set your posts to go to the relevant category.

Typically the "home" page will show ALL posts from all categories. By default it shows the most recent posts and updates as new material comes on board.

Depending on your theme, you can alter the code to only show certain categories in that spot. You can also make your home page a 'static' page sonew posts won't show up there.

You can create navigation links at the top of the page that show 'categories' instead of 'pages' and that would take people to that category page, but if you don't have any posts there, it will be blank.

Your "Pages" on your top navigation are static pages, not "Category" pages. For example, your "computer" category page is Computer :What we feel, can be real. and not Computers :What we feel, can be real..

(Also, you should adjust your permalinks to SEO friendly links. /?page_id=183 is no good to the search engines, but /computers is)

**This part is an assumption based on limited details** You say your posts are coming in by xml-rc, so I am guessing you have article automatically supplied via a plugin or syndication site like AMA/UAW. If that is the case, you have to MAP your article topics to the corresponding categories on your site. Then they will go there automatically.