I am working on a similar plan. I am switching my links over to 2 moveabletype blogs instead of a single blogger blog for each category. I will use MT categories to sort through the links, provide quick use pull-down menus and longer form link lists... The second MT link blog will be used for user-submissions only. I will have a single login for all users, sort-of like the guest posting idea from before, and let people submit links. I think it's a great idea for you too.

Now I have one question...Even though I have an account with blogroll, I have yet to actually use it.. How does this work together? Can it? Will you be forced to re-add all those links? Have you seen anything more clever than jus tthe giant list that we see so often on so many blogs?

Yeah, I realize that my way is not the most efficient solution for the links. I am not the most secure user with archives and all, so I will need to go down the wider path and just have a separate MT blog for each category. They still use the same bookmarklett.

As for Blogrolling. You can only have two blogrolls with the free account, this is why people have these long lists, just the way I have it now.
I just paid for my account though ($15) and now I will be able to display the same links as in the links section of the page, organized by the same categories, except with the advantages of blogrolling, which are sorting by activity, alphabetically, monitoring and such. I will probably enter the interesting ones into links first and then just add them to blogrolling later. It is easy so it is not a problem. I wish I were able to integrate the PHP version of blogrolling though. I am currently using the javascript version and the links are not recognized as such by robots. This way it seems that I am not linking to anyone, while there are almost 160 links on my blog.
Oh, well... slooowly, sloowly...