I like the Favoriate Smilies hack.
Anyway, you've already created the default smilie category and set the 4 rows of 10 smilies in each. In Admin CP --> vBulletin Options --> vBulletin Options --> Message Posting Interface Options set the number of smilies you want appeared in the smilies box. Example, if you have 20 in the default category and want to have displayed only the smilies from that category then set the number to 20. If you select 21 then 1 smilies from the next category will appear.