I’m not sure if this is the only way – but I just figured out that Posts are displayed by a published date, which is not necessarily the order you enter them.
If you’re posts aren’t in the order you want them – look into modifying the published date.
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You can explicitly set the sort order fro posts by category. Click "Sort Order" on the category edit screen.
Note: I guess this means we probably need to expose this functionality some where more intuitively.
-Scott