I have an Empty SharePoint solution where I added an EventReceiver that attempts to create a new Diagnostic category to my SharePoint farm. To test I am setting a breakpoint on the FeatureActivated method and F5 debugging but it is not hit. Am I using the wrong approach or missing a concept?
If you mean EventReceiver for the feature then you need to attach to the VSSHost process of Visual Studio 2010 which is actually running the code on activation during an F5 deploy.
Another approach would be to set the solution to 'no activation' and then attach the debugger to the process after a F5, activate the feature, now it should hit the feature code.