You are given up to five categories to choose from in Google Places and I would use them all.
Categories are like industries and they help Google understand what your business is and what it does. Some examples are: wedding photographers, dentist, orthodontist, and so on. Google recommends that you choose at least 1 category from their pre-determined list and I would make this the first category that you choose. Try to find the one that best describes your business.
Your category describes what your business is, not what it does or what products you sell. For example, a dentist should list "dentist" as its category, not "teeth cleaning" (what it does), or "water pik" (what it sells). This sort of information can go in your description or attributes.
For additional categories, if you can find others on the list that describe what your business also is, go ahead and select them. If you do not see other categories that fit your business, here is a chance to input your own category to help give Google the specific information it needs about your business.
For example, if you are a dentist and more specifically you are also a Cosmetic Dentist and/or a Cosmetic Surgeon, these would be excellent terms to put in as your categories. You should aim for category descriptions that are specific, but brief.
Do not put locations into your category, i.e. Sacramento Dentist and do not put multiple categories in each field.
Here at Google Places Ranking you can find everything you need to Claim your Place Page and start ranking in Google Places. You may call or email with your questions, or if you want to hire me, I would love to do the work for you, so you can focus on your business.