with apache you can use .htaccess and mod rewrite.
in the .htaccess set:
Options +Indexes
RewriteEngine on
then rewrite the urls (also in .htaccess), for example the rule for the link you posted. for categories you can choose a better name:
RewriteRule ^categories/(.*)/$ /index.php?cat=$1
the link for that rewrite rule would be:
<a href="/categories/Automotive/">Automotive</a>
<a href="/categories/Babies%20Needs/">Babies Needs</a>
...
of course you can set more rewrite rules, for example for 2 $_GET['']s:
RewriteRule ^categories/(.*)/(.*)/$ /index.php?cat=$1&subcat=$2
the links for that rewrite rule would be:
<a href="/categories/Automotive/subAuto/">Automotive</a>
<a href="/categories/Babies%20Needs/subBabies/">Babies Needs</a>
...