If I click on Latest button - it doesn't show un-categorised section posts - I have to explicitly go into that section to view posts
You're totally right. I've scanned through the settings and couldn't find a way to fix that, and I've also looked online for a while with no luck.
@cycomachead, any ideas? 
The other Discourse forum I use doesn't have un-categorised section - so maybe solution is to move the posts into other categories and then just remove it?
Good idea. Now we have to think what to call it. Watercooler? Schmoozing? Off-off-topic?