Similiar to what I am requesting. First under category maybe list restaurant then a pop out to the side which would display sub categories such as Mexican, Italian, Greek etc

try this, put the town name in the address field, then choose your category then search

Hi Guys, we are now in discussion on this feature and will update you as soon as possible, thanks for participating

A tag or taxonomy that would include the city name so it could be part of the url along with the listing category would allow a city-listing-category page where we could add seo content to try to rank that city-keyword pair.

Ideally as can be seen by most directories like yelp, the visitor, chooses a category, then "near" which is a city (they use location to suggest the city). so if we had an option to display search as listing category and city, to then display the map and all the matching listings that would be perfection

Second this motion!

I agree, this is similar to the request that I submitted

I agree. Most won't know the address.