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For best practices, how deep can tabbed categories / filters go? Like in my example, for this page, there is a broad category 1, 2, 3 that the user can choose from. Then for each of these categories, there can be a filter to narrow it further. It may also be the case that for each filter, it can be filtered even further (and can have another batch of tabbed filters).
Should these filters don't go further than 2 levels deep? And if it shouldn't, what would be the better method instead?
As always in design the best answer is: "It depends".
If these categories are looking like tabs visually, you don't want to create a tab hell, like this one:
http://lh4.ggpht.com/mangazey/SNYIIWssICI/AAAAAAAAAy4/PuMjceOxcsE/1_tabs_c.gif
So I would recommend not to have more than 2 levels.
But it really depends on the content too. So if I were you I would start with analyzing the content and the user goals. What kind of information do you want to display here? What will people use this thing for? And build up the interface from there.
To understand how people use your interface you can do some user tests with wireframes. To understand their mental model (how they categorize these information themselves) you can do some cart sorting. And if you have a final solution in place you can validate it with reverse card sorting, like treejack.com.
So my main advice is to step back, understand the data and the people, and build a better solution from scratch.
