When using a single XML file, you can choose how you want your videos displayed. You can display them alphabetically, with subcategories which are on the same level as videos being displayed before the videos, or you can display them in the same order in which they appear in the XML file.
To choose how you want to display your categories and subcategories, go to Options -> My Options -> Video Preferences -> Video Category Order. Here you can choose to display your categories and subcategories either alphabetically, or in XML order. Select your choice, then select Exit.