This was announced today at SPS and coffeetable: John Baez & Urs Schreiber, Higher Gauge Theory: 2-Connections on 2-Bundles http://www.arxiv.org/abs/hep-th/0412325 quote from abstract: "...the concept of ‘2bundle’ recently introduced by Bartels. A 2-bundle is a generalization of a bundle in which the fibers are categories rather than sets. Here we introduce the concept of a ‘2-connection’ on a principal 2-bundle..." might be important the arxiv link will not work until next week because of holidays but the paper (73 pages) can be downloaded from a link Urs gave Eric Forgy, who sometimes posts at PF, did some pictures for this paper. Work by Florian Girelli and Hendryk Pfeiffer is cited. As such things go, the paper looks comparatively readable---at least by categoriphiles.