re: I’m using the Names 1.0.1 default template. However, I cannot see the listing of the assigned categories to the sample contacts (individuals) I’ve entered when I visit my directory page.
Sorry, but I am not sure I completely understand… but if you are using the Names template, the only thing you will see is the entry name. That template is included primarily for the “VIew All” page. In general, I do not recommend using it for your directory template. Of course you can if you wish, but then I highly recommend enabling the Single Entry Template option on the Connections : Settings admin page under the Display tab. This will tell Connections to use the templates activated under the specific entry type found on the Connections : Templates admin page.
re: when I go to an individual’s contact name, the assigned categories are visible, but do not link to the larger category.
Right, the categories are simply listed. They are not permalinks.
re: Is this functionality available in these default themes?
No, it is not. I am working on releasing a new extension, Enhanced Categories. Its ready for use. I have not yet officially released it because I am still working on the documentation. Even the sales page is more of an initial draft than a completed page.
I hope I have answered your questions and have answered them thoroughly!