Error occurred while adding 'Point Category' field in Views.

The reason is that the views_handler_field class parameter definition is different from the class userpoints_views_handler_field_category. The different is in the use of ampersands. This can be resolved in userpoints_views_handler_field_category.inc by changing the lines:
FROM: function init(&$view, $options) {
TO: function init(&$view, &$options) {

and
FROM: function pre_render($values) {
TO: function pre_render(&$values) {

If this is an acceptible change, I can write a patch for it

Please do so. That probably changed at some point in Views but was never updated in Userpoints.

Here is the patch. Note that it will also need to be applied to the 7.x-2.0 code

My last patch seemed to fail testing due to non-Unix line endings. Try this one instead

Remember to set issues with patches to needs review so that they are tested.

There's something wrong with the path of the file in your patch.

It's in a views subfolder, that needs to be reflected in the patch, e.g. a/views/...

Hopefully this one should be better. If not, can we catch up at DrupalCon Denver to resolve?

Thanks, committed to both branches.

Double post. Slow network here :)

You know, it would be helpfull if you brought this update to the recommended release. Just saying... (Not everyone is working with dev versions)

@robbe: Agreed, it would be nice if this patch would be committed to the module's recommended version.