The Smart Syndication Module in Joomla 1.7 creates a different Feed for each page (that's why it's smart), but does not combine Article Categories into one Feed.
At the time of writing there did not seem to be a non-commercial J1.7 compatible way to create one RSS Feed from selected Joomla Article Categories. Yahoo Pipes is probably not the only way this can be done, but it seems to work well and it's free. If you haven't checked out Yahoo Pipes yet you might like it for mashing RSS Feeds and it has a cool user interface.
