Would it be possible to add options to Categories to Exclude function?
1. No related posts are shown on posts that are in any of the excluded categories (but the posts themselves will appear in related posts at other posts).
2. No posts from excluded categories are shown in related posts at other posts (but related posts will continue to appear in posts that are in excluded categories).
3. Both.
I would prefer option 2.
http://wordpress.org/extend/plugins/wordpress-23-related-posts-plugin/