I am building a bespoke e-commerce site in SQL Server and I need some advice on the best way to set up a table to hand categories and unlimited levels of sub categories.

I have seen this article:

http://dev.mysql.com/tech-resources/articles/hierarchical-data.html

BUT that is MYSQL and not sure whether their method is the best way of doing. I also need the ability to add/edit/delete categories.

Regards
Dave.

That would work fine for you.

When you create the table, you can also set the permissions for your users as far as being able to add/edit/delete (INSERT, UPDATE, DELETE). You should build an interface to add/edit/delete the records.