I have solved the UI problem in the modal that was holding up the release of Media Categories 1.5. However due to an additional bug reported to me on GitHub Issues, I did not get a chance to test the plugin in earlier version of WordPress.
The bug reported was due to an oversight on my part - in my rush to get this out the door, I had hardcoded much of the Javascript and CSS to work specifically for the ‘category’ taxonomy which I meant to go back later and fix - but I forgot. The Media Categories plugin has, since its inception, been intended to be used with any desired taxonomy. Thanks to GitHub user “stvwlf” for the bug report.
I believe Media Categories 1.5 should be fully functional for WordPress 3.5 at this point, but I wont release until I get a chance to test all aspects of it are backward compatible. If you would like to download Media Categories 1.5 Beta 2 ( zip / tar.gz ) now you can get by downloading the version specific tag in GitHub or you can get whatever is the most recent right off the master branch.