Mo, I'm not an engineer, but I'll tell you what I know. The seismic design categories are a hierarchy of engineering specifications that vary with the building site's probability of experiencing severe seismic ground motion, the site's soil type, and the building's intended use. The determinations are made by the ASCE (American Society of Civil Engineers) and mandated in IBC 2003. The category determines the value of certain variables in the equations that produce load calculations on walls. The higher the category, the higher the load, and the design requirements become more rigorous.
The scale goes from A to F. Although D is right in the middle, it seems that most of California gets a D rating as well, so it's not a trivial classification.
