I found a decent guide to your question on the Eastern Collegiate Conference,
http://www.eccc-info.com/content/faq_category.html, except we don't have a "D" category here, and we don't have team leaders or care about points that much (unless you're from MSU).
Basically, you can choose your category at any time (though you can't change during a weekend of racing). So, try the C's first, and if you find it easy, go ahead an move up to the B's for the next race. However, if you're doing well in the C's, but still feel uncomfortable riding close to people, you should probably stay in the C's for the learning experience.
Also, no one likes to get dropped, which is a big part of the reason people are worried about choosing the right category, but it is not that big of a deal. Especially in collegiate races. The races are never big, so things eventually spread out a little, so even if you're having a bad day and finish off the back, you're one of many. The A races are usually so small and long that the biggest groups to roll across the line are around 4 riders in a lot of races. I've rolled in by myself more than once (never out front, unfortunately). Besides, there isn't any money in these races, so it's all about the challenge.
As far as speeds go, this is one of the biggest differences between racing and riding. The average speeds aren't the big deal, it's the few big spikes in speed that make the difference in the race. Maybe some of our more experienced riders can give you some numbers, but I'd bet you could keep up with the group for sure. It's just that hill, 20th corner, crosswind section, or final sprint that makes the difference. Hope this helps.
-Troy D.