This is a simple little plugin which will:

display the categories under which an entry is filed in the following way:

Single category: Category1
Two categories: Category1 and Category 2
Three categories: Category1, Category2 and Category3
Four categories: Category 1, Category 2, Category 3 and Category 4

I installed the plugin in the Plugins directory and activated it. Then I just needed to do some minor modifications to my theme files to get it to display the categories nicely.

Picked the plugin up from txfx.net at this page.