All credit for this module goes to Excelsior for the original contribution "Display Category" (http://addons.oscommerce.com/info/1854). I just made a couple small modifications that changes its functionality.
On the index page (in the new_products.php box) I wanted to restrict the products displayed to just a few categories, rather than having all the categories being part of the random rotation of products. Some of the products in the database didn't need to be displayed on the homepage.
It will display products randomly from the category (or categories) you specify.
Basically you have 2 options:
1) You can provide a "range" of categories to randomly display products from
2) You can provide specific categories for the products to randomly display from