I was writing a bulk category/product import script for magento 1.7. For debugging I had to frequently clear all the erroneous data inserted while coding and run my script again and again. Searching for an easy solution I came into this magento wiki that has the queries to delete all the products and categories for Magento 1.5 and 1.6. In 1.7 the attribute ids are not same so I needed an updated one. So here is the queries for 1.7 to reset your product / category tables to the initial position just after fresh magento installation.
Please note the first and last sql commands that are used to ignore the foreign key constraints. Without these 2 lines, you will get error.
UPDATE: As everybody was complaining and at last “camulatz” noted the issue that the ' was being converted by wordpress. I have updated the SQLs and should be working now.
SET FOREIGN_KEY_CHECKS = 0;
TRUNCATE TABLE `catalog_product_bundle_option`;
TRUNCATE TABLE `catalog_product_bundle_option_value`;
TRUNCATE TABLE `catalog_product_bundle_selection`;
TRUNCATE TABLE `catalog_product_entity_datetime`;
TRUNCATE TABLE `catalog_product_entity_decimal`;
TRUNCATE TABLE `catalog_product_entity_gallery`;
TRUNCATE TABLE `catalog_product_entity_int`;
TRUNCATE TABLE `catalog_product_entity_media_gallery`;
TRUNCATE TABLE `catalog_product_entity_media_gallery_value`;
TRUNCATE TABLE `catalog_product_entity_text`;
TRUNCATE TABLE `catalog_product_entity_tier_price`;
TRUNCATE TABLE `catalog_product_entity_varchar`;
TRUNCATE TABLE `catalog_product_flat_1`;
TRUNCATE TABLE `catalog_product_link`;
TRUNCATE TABLE `catalog_product_link_attribute`;
TRUNCATE TABLE `catalog_product_link_attribute_decimal`;
TRUNCATE TABLE `catalog_product_link_attribute_int`;
TRUNCATE TABLE `catalog_product_link_attribute_varchar`;
TRUNCATE TABLE `catalog_product_link_type`;
TRUNCATE TABLE `catalog_product_option`;
TRUNCATE TABLE `catalog_product_option_price`;
TRUNCATE TABLE `catalog_product_option_title`;
TRUNCATE TABLE `catalog_product_option_type_price`;
TRUNCATE TABLE `catalog_product_option_type_title`;
TRUNCATE TABLE `catalog_product_option_type_value`;
TRUNCATE TABLE `catalog_product_super_attribute`;
TRUNCATE TABLE `catalog_product_super_attribute_label`;
TRUNCATE TABLE `catalog_product_super_attribute_pricing`;
TRUNCATE TABLE `catalog_product_super_link`;
TRUNCATE TABLE `catalog_product_enabled_index`;
TRUNCATE TABLE `catalog_product_website`;
TRUNCATE TABLE `catalog_product_entity`;
TRUNCATE TABLE `cataloginventory_stock`;
TRUNCATE TABLE `cataloginventory_stock_item`;
TRUNCATE TABLE `cataloginventory_stock_status`;
TRUNCATE TABLE `catalog_category_entity`;
TRUNCATE TABLE `catalog_category_entity_datetime`;
TRUNCATE TABLE `catalog_category_entity_decimal`;
TRUNCATE TABLE `catalog_category_entity_int`;
TRUNCATE TABLE `catalog_category_entity_text`;
TRUNCATE TABLE `catalog_category_entity_varchar`;
TRUNCATE TABLE `catalog_category_product`;
TRUNCATE TABLE `catalog_category_product_index`;
INSERT INTO `catalog_category_entity` (`entity_id`, `entity_type_id`, `attribute_set_id`, `parent_id`, `created_at`, `updated_at`, `path`, `position`, `level`, `children_count`) VALUES (1, 3, 0, 0, '2012-06-17 22:20:47', '2012-06-17 22:20:47', '1', 0, 0, 1), (2, 3, 3, 1, '2012-06-17 22:20:47', '2012-06-17 22:20:47', '1/2', 1, 1, 0);
INSERT INTO `catalog_category_entity_int` (`value_id`, `entity_type_id`, `attribute_id`, `store_id`, `entity_id`, `value`) VALUES (1, 3, 67, 0, 1, 1), (2, 3, 67, 1, 1, 1), (3, 3, 42, 0, 2, 1), (4, 3, 67, 0, 2, 1), (5, 3, 42, 1, 2, 1), (6, 3, 67, 1, 2, 1);
INSERT INTO `catalog_category_entity_varchar` (`value_id`, `entity_type_id`, `attribute_id`, `store_id`, `entity_id`, `value`) VALUES (1, 3, 41, 0, 1, 'Root Catalog'), (2, 3, 41, 1, 1, 'Root Catalog'), (3, 3, 43, 1, 1, 'root-catalog'), (4, 3, 41, 0, 2, 'Default Category'), (5, 3, 41, 1, 2, 'Default Category'), (6, 3, 49, 1, 2, 'PRODUCTS'), (7, 3, 43, 1, 2, 'default-category');
INSERT INTO `catalog_product_link_type` (`link_type_id`, `code`) VALUES (1, 'relation'), (3, 'super'), (4, 'up_sell'), (5, 'cross_sell');
INSERT INTO `catalog_product_link_attribute` (`product_link_attribute_id`, `link_type_id`, `product_link_attribute_code`, `data_type`) VALUES (1, 1, 'position', 'int'), (2, 3, 'position', 'int'), (3, 3, 'qty', 'decimal'), (4, 4, 'position', 'int'), (5, 5, 'position', 'int');
INSERT INTO `cataloginventory_stock` (`stock_id`, `stock_name`) VALUES (1, 'Default');
SET FOREIGN_KEY_CHECKS = 1;

 Note: Thanks to imranul hoque's blog for publishing this article.