This is more of an accessibility question than a technical question

Technically you can do whatever you would like (x-number of categories). What you need to consider is that the more categories you put a product, the more confusing it might seem for your customers.

By the way, taking your example, I would use the views module or a similar technique for creating this "$0 to $10.." listings. That way they will be 100% dynamic so you won't have to remember restructuring your categorization every time you change a product price

Best regards,
Thomas Kulvik

Ny Media AS
www.nymedia.no
+47 4000 7955