WordPress Category View Problem: Display posts by Group, etc.

I already posted this on the WordPress forums, but never received any response for help. Since this is an issue involving some PHP code, I thought someone here might be able to help me solve my problem.

---------------------------

I am trying to format the grouping of posts in the following manner.

Category 1 Header Image

Post 1 in Category 1
Post 2 in Category 1
..etc.

Category 2 Header Image

Post 1 in Category 2
Post 2 in Category 2
..etc.

I have got it to display correctly when only on the homepage using the following code:

<?php
   if (is_home()) {
      query_posts("showposts=5&cat=3");
   }
?>
	<?php if (have_posts()) :?>
    <img src="/images/cat1_header.gif" alt="Title" title="Category 1 Title" /><br />
		<?php $postCount=0; ?>
		<?php while (have_posts()) : the_post();?>
			<?php $postCount++;?>
	<div class="entry entry-<?php echo $postCount ;?>" style="margin-bottom: -5px;">
		<div class="entrytitle">
        <table cellpadding="0" cellspacing="0" border="0">
        	<tr>
            	<td width="64" valign="top"><h3><?php the_time('m.d.y') ?></h3></td>
				<td valign="top"><h2><?php the_title(); ?></h2>
                	<p class="entrypreview">
					<?php the_content('Read the rest of this entry &raquo;'); ?>
					</p></td>
            </tr>
        </table>
		</div>
	</div>
	<?php endwhile; ?>
    <img src="/images/page_white_stack.png" alt="" /><a href="/cat1earchive.php">Category 1 Archive</a><br />
		<div class="navigation">
			<div class="alignleft"><?php next_posts_link('&laquo; Previous Entries') ?></div>
			<div class="alignright"><?php previous_posts_link('Next Entries &raquo;') ?></div>
		</div><br />

	<?php else : ?>

		<h2>Not Found</h2>
		<div class="entrybody">Sorry, but you are looking for something that isn't here.</div><br />

	<?php endif; ?><br />

<?php
      query_posts("showposts=5&cat=4");
?>
	<?php if (have_posts()) :?>
<img src="/images/cat2_header.gif" alt="Title 2" title="Cat2" /><br />
		<?php $postCount=0; ?>
		<?php while (have_posts()) : the_post();?>
			<?php $postCount++;?>
	<div class="entry entry-<?php echo $postCount ;?>" style="margin-bottom: -5px;">
		<div class="entrytitle">
        <table cellpadding="0" cellspacing="0" border="0">
        	<tr>
            	<td width="64" valign="top"><h3><?php the_time('m.d.y') ?></h3></td>
				<td valign="top"><h2><?php the_title(); ?></h2>
                	<p class="entrypreview">
					<?php the_content('Read the rest of this entry &raquo;'); ?>
					</p></td>
            </tr>
        </table>
		</div>
	</div>
	<?php endwhile; ?>
    <img src="/images/page_white_stack.png" alt="" /><a href="/cat2archive.php">Category 2 Archive</a><br />
		<div class="navigation">
			<div class="alignleft"><?php next_posts_link('&laquo; Previous Entries') ?></div>
			<div class="alignright"><?php previous_posts_link('Next Entries &raquo;') ?></div>
		</div><br />

	<?php else : ?>

		<h2>Not Found</h2>
		<div class="entrybody">Sorry, but you are looking for something that isn't here.</div><br />

	<?php endif; ?>

Code (markup):

There are a few problems with it that I can't figure out.

1. When viewing an individual post page, it always displays the category 1 header then the requested post regardless of category. Below that it displays the second category listing as done on the home page:

Category 2 Header Image

Post 1 in Category 2
Post 2 in Category 2
..etc.

It should instead only display the category header image for the relevant category and the individual post.

2. If I click on my archive list to view all entries from a specific month, I see the exact same content as on the homepage. (It basically redirects you to the homepage regardless of archive month selected.)

 

Can anyone help me with this?