I now have over 700 songs downloaded from 3-4 different genres of music, but it wont save them into the seperate catogories. I have tried about 5 times, enque each individual song per catagory and save as whatever(rock, country, hip hop) but they dont save except as a big block all together.

What the hell am I doing wrong?

You can't re-save playlists. You must save them as new playlists each time. The LW proggies know about this (I thought they'd already fixed it), so hopefully in the next release it will be fixed.

You'd need also to save a playlist for each genre individually.

To learn more about playlists & saving them, see Playlists & how to create them (click on link)