Build the select form in your view…
<% @categories = Category.find(:all, :order=>"title") %>
<%= collection_select(:service, :category_id, @categories, :id, :title) %>
And access the selected value from the controller (inside the create and update methods):
@service.category_id = params[:service][:category_id]
Of course category_id
needs to be made accessible in the services model.