I would say that it depends on the business policies and on how strictly one is supposed to follow them...

On my previous job, we were told to fill out timesheets... However, as there were only three people supporting network/Wintel servers/users etc, we decided we do not want to spend time on paperwork and the project promptly died...

In my current company, the timesheets are submitted weekly and are strictly enforced. The official reason is "...to track the time needed for the projects for the purpose of better resource management", although I believe the main reason behind them is the quarterly performance reviews...
The categories are selected from existing list (that's what the PlanView administrator is doing, building those categories); any new category I feel could describe my tasks better, should be properly documented and approved by an immediate manager.
The granularity is not strictly enforced though... you just enter a number in a box, it could be 1, or 1.5, or 1.25... The main goal is that in the end, there should be 37.5 hours of regular work per week.

All in all, I think it comes down to the question: Am I paid well enough to cope with what I believe is unproductive and/or plain stupid?... I know I am now, although that perception might change later :)