You're binding too much; you only need to set SelectedValue and SelectedValuePath, or SelectedItem. In this case, it looks like you're actually trying to bind to a specific object. If you're trying to have the ComboBox set the Category property on your Book and the current Book object actually has a reference to a Category instance that's in categoryList, then you should use the SelectedItem binding and remove the bindings for SelectedValue and SelectedValuePath.
Edit
To expand a little on how this is done, SelectedValue is designed to be used when you have a common piece of information to link your bound item with a property on the list source. For instance, let's say I have a Book class with a CategoryID property.
public class Book
{
public string CategoryID { get; set; }
public string Title { get; set; }
}
public class CategoryID
{
public string ID { get; set; }
public string Name { get; set; }
}
In this case, you would do:
<ComboBox SelectedValue = "{Binding CategoryID}"
SelectedValuePath = "ID"
DisplayMemberPath = "Name" />
SelectedItem, on the other hand, is for when the bound instance has an actual reference to (or, more precisely, an object that is equivalent to) an item in the bound list. So, let's assume the Book class actually looks like this:
public class Book
{
public Category Category { get; set; }
public string Title { get; set; }
}
In this case, you would do:
<ComboBox SelectedItem = "{Binding Category}"
DisplayMemberPath = "Name" />
But it's very important to note that this will not work unless the Book class has a reference to the same instance of Category as you have in the list. If the references are different (even if the values on the classes are equal) then this won't work, as the ComboBox won't be able to find the Category referenced in the Book in the list.
The real problem with the way you were binding it up top (by binding to Category.ID) is that you're mixing the schemes. You have a reference, but you're trying to bind on the key instead. All this will do is try to set the value on your reference, it will not try to change the reference on your class.