Had a conversation with Marriott about this very subject two days ago...
Some highlights...
The reservations made before the category change will be honored at the prior category level.
If a customer ordered a certificate (like a travel package) prior, and then make a reservation for the property at the new category level, they can "buy up" by calling MR.
The customer informs the hotel, upon arrival, that the certificate for the stay exists in their MR account and the hotel accesses the points electronically.
Travel package hotel certificates can be extended for one year at no cost.
I realize most of this is common knowledge, but wanted to confirm it from a recent contact. A perennial favorite value of mine, the Sydney Harbour Marriott, changed last week.
A tip....once you start getting within a month or so of your desired stay, start making rolling points reservations as inventory becomes available a year out. That way you'll stay on top of this and know exactly when the property changes category, if it does. I did this with Sydney, and currently have reservations from mid-December through January 21, 2007, except for New Year's weekend, when there was no availability at standard award levels.
I also booked the new Residence Inn at Time Square on points, using the same procedure, as soon as it was available for booking last year. Outstanding value for a Cat6, considering the BAR for this October is 390.00/nt. I doubt it'll go Cat7, but, since Cat is based on what Marriott pays the property, not location, ammenities or popularity, it just might. I remember when the Courtyard in upper mid-town (53rd/3rd) went from a Cat5 to Cat6; the rates went from 159.00/nt to 289.00/nt overnight

Luckily, I booked it at the lower rate a year in advance...
Playing the Marriott points game is just like timesharing, eh?
Pat