joomla 1.7 404 error when clicked on categories

When I click on a categoru in the menu, I get a 404 problem.

On another post someone had the same problem, you said "Please make sure that you have a category listing menu selected as "menu" in the hikashop options of your module", but I do not understand this?

When I enter the "hikashop options" in the module that displays categories, on bottom left I have Menu - Menu item for Category listing module 45, is that what you meant or something else? (i do not see any other menu option here)

p.s. Are these the options you are reffering to?

AS you can see in the image above I have category listing under menu but it still doesn't work?

Or did you mean something else?

Joomla has latest version available, 1.7.5. have you tried using it?

I think 2.5 is newest, regardless, it should work on 1.7, I think I'm just missing something.

Can Nicolas please respond? I gave the image of the settings as they are.