While I've been able to get this working for normal WP categories I've been unable to get it working for custom taxonomies.
I'd like to loop through each custom taxonomy (categories in my case) and produce a number of posts for each.
An example of the output would be:
Category 1 post from category one post from category one read more category one Category 2 post from category two post from category two read more category two
Of course it would repeat through any available taxonomy for the custom post type.