Remove the Categories and Products through PHPMyAdmin

Truncate Magento Categories

TRUNCATE TABLE `catalog_category_entity`;
TRUNCATE TABLE `catalog_category_entity_datetime`;
TRUNCATE TABLE `catalog_category_entity_decimal`;
TRUNCATE TABLE `catalog_category_entity_int`;
TRUNCATE TABLE `catalog_category_entity_text`;
TRUNCATE TABLE `catalog_category_entity_varchar`;
TRUNCATE TABLE `catalog_category_product`;
TRUNCATE TABLE `catalog_category_product_index`;

insert  into `catalog_category_entity`(`entity_id`,`entity_type_id`,`attribute_set_id`,`parent_id`,`created_at`,`updated_at`,`path`,`position`,`level`,`children_count`) values (1,3,0,0,'0000-00-00 00:00:00','2009-02-20 00:25:34','1',1,0,1),(2,3,3,0,'2009-02-20 00:25:34','2009-02-20 00:25:34','1/2',1,1,0);
insert  into `catalog_category_entity_int`(`value_id`,`entity_type_id`,`attribute_id`,`store_id`,`entity_id`,`value`) values (1,3,32,0,2,1),(2,3,32,1,2,1);
insert  into `catalog_category_entity_varchar`(`value_id`,`entity_type_id`,`attribute_id`,`store_id`,`entity_id`,`value`) values (1,3,31,0,1,'Root Catalog'),(2,3,33,0,1,'root-catalog'),(3,3,31,0,2,'Default Category'),(4,3,39,0,2,'PRODUCTS'),(5,3,33,0,2,'default-category');
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Truncate Magento Products

TRUNCATE TABLE `catalog_product_bundle_option`;
TRUNCATE TABLE `catalog_product_bundle_option_value`;
TRUNCATE TABLE `catalog_product_bundle_selection`;
TRUNCATE TABLE `catalog_product_entity_datetime`;
TRUNCATE TABLE `catalog_product_entity_decimal`;
TRUNCATE TABLE `catalog_product_entity_gallery`;
TRUNCATE TABLE `catalog_product_entity_int`;
TRUNCATE TABLE `catalog_product_entity_media_gallery`;
TRUNCATE TABLE `catalog_product_entity_media_gallery_value`;
TRUNCATE TABLE `catalog_product_entity_text`;
TRUNCATE TABLE `catalog_product_entity_tier_price`;
TRUNCATE TABLE `catalog_product_entity_varchar`;
TRUNCATE TABLE `catalog_product_link`;
TRUNCATE TABLE `catalog_product_link_attribute`;
TRUNCATE TABLE `catalog_product_link_attribute_decimal`;
TRUNCATE TABLE `catalog_product_link_attribute_int`;
TRUNCATE TABLE `catalog_product_link_attribute_varchar`;
TRUNCATE TABLE `catalog_product_link_type`;
TRUNCATE TABLE `catalog_product_option`;
TRUNCATE TABLE `catalog_product_option_price`;
TRUNCATE TABLE `catalog_product_option_title`;
TRUNCATE TABLE `catalog_product_option_type_price`;
TRUNCATE TABLE `catalog_product_option_type_title`;
TRUNCATE TABLE `catalog_product_option_type_value`;
TRUNCATE TABLE `catalog_product_super_attribute`;
TRUNCATE TABLE `catalog_product_super_attribute_label`;
TRUNCATE TABLE `catalog_product_super_attribute_pricing`;
TRUNCATE TABLE `catalog_product_super_link`;
TRUNCATE TABLE `catalog_product_enabled_index`;
TRUNCATE TABLE `catalog_product_website`;
TRUNCATE TABLE `catalog_product_entity`;

TRUNCATE TABLE `cataloginventory_stock`;
TRUNCATE TABLE `cataloginventory_stock_item`;
TRUNCATE TABLE `cataloginventory_stock_status`;

insert  into `catalog_product_link_type`(`link_type_id`,`code`) values (1,'relation'),(2,'bundle'),(3,'super'),(4,'up_sell'),(5,'cross_sell');
insert  into `catalog_product_link_attribute`(`product_link_attribute_id`,`link_type_id`,`product_link_attribute_code`,`data_type`) values (1,2,'qty','decimal'),(2,1,'position','int'),(3,4,'position','int'),(4,5,'position','int'),(6,1,'qty','decimal'),(7,3,'position','int'),(8,3,'qty','decimal');
insert  into `cataloginventory_stock`(`stock_id`,`stock_name`) values (1,'Default');


Ref: http://www.magentocommerce.com/boards/viewthread/20553/