A file category is a named group of file extensions that can be associated with an skEdit bundle. That bundle will be used for any file with one of the extensions. In addition, skEdit maintains a list of file types it should ignore altogether. The file categories can be edited in the Files preference pane.
There are two main types of file categories: text and image. Text file categories will be displayed using the normal text editor, while image categories will display a preview of the image. When doing multi-file operations, such as search and replace or HTML Tidy, skEdit will only operate on files belonging to a text category.
If you attempt to open a file with an extension skEdit does not recognize, it will ask you to assign the type to a file category. If a file does not have an extension, skEdit will do its best to guess if the file is text, an image, or something else.