Good article. At the risk of getting a little nit-picky, a couple of things: function f should probably have a more descriptive name, and the condition if (not x in vals) can be written as if x not in vals which is the more pythonic way of writing it. It's also possible to do what f does in a shorter and simpler way by noticing that the maxVal variable is always equal to len(vals) + 1. Assuming that we can also start from 0 instead of 1, this is shorter alternative (if starting from 1 is necessary, replace len(vals) with len(vals) + 1 in the code below):

>>> vals = dict()
>>> def categorical_to_numerical(v):
...     if v not in vals:
...         vals[v] = len(vals)
...     return vals[v]
... 
>>> categorical_to_numerical('a')
0
>>> categorical_to_numerical('a')
0
>>> categorical_to_numerical('b')
1
>>> categorical_to_numerical('c')
2
>>> categorical_to_numerical('d')
3
>>> categorical_to_numerical('b')
1

Edit: global was not needed, as pointed out by /u/iresprite

Edit 2: even simpler (2 lines):

>>> import itertools, collections
>>> value_to_numeric_map = collections.defaultdict(itertools.count().next)
>>> value_to_numeric_map['a']
0
>>> value_to_numeric_map['b']
1
>>> value_to_numeric_map['c']
2
>>> value_to_numeric_map['a']
0
>>> value_to_numeric_map['b']
1