I actually can add a category via setup script, the thing is for some reason some of the fields doesn\'t get set properly. Here\'s is my code
$this->start
I have created multiple categories via installer script.
startSetup();
Mage::register('isSecureArea', 1);
$category = Mage::getModel('catalog/category');
$category->setPath('1/2/4') // set parent to be root category
->setName('CAT NAME') //Category Name
->setIsActive(1) // Category Status
->setIncludeInMenu(1) // Show in Menu
->setIsAnchor(1) // used for Layered navigation
->setDisplayMode('PAGE') // Product Only
->setPageLayout('one_column') // Page layout
->save();
$installer->endSetup();