Categories problem in Modularity theme

The five categories I have displayed on my home page are only recognizing the same most recent post, even though it is categorized differently than others. I have my theme options set to 5 different categories. Also, the title of the categories have gone away.

The order of categories should read:

T-shirts
Tote Bags
Greeting Cards
More Designs
Matt Gourley

And each should link to the list of category posts.

http://www.hotspurink.com/wordpress/