Index: wp-admin/link-manager.php
===================================================================
--- wp-admin/link-manager.php	(revision 4626)
+++ wp-admin/link-manager.php	(working copy)
@@ -76,7 +76,7 @@
 <p><?php _e('Here you <a href="link-add.php">add links</a> to sites that you visit often and share them on your blog. When you have a list of links in your sidebar to other blogs, it&#8217;s called a &#8220;blogroll.&#8221;'); ?></p>
 <form id="cats" method="get" action="">
 <p><?php
-$categories = get_categories("hide_empty=1&type=link");
+$categories = get_categories("hide_empty=1&type=link&hierarchical=0");
 $select_cat = "<select name=\"cat_id\">\n";
 $select_cat .= '<option value="all"'  . (($cat_id == 'all') ? " selected='selected'" : '') . '>' . __('All') . "</option>\n";
 foreach ((array) $categories as $cat)