The joys of owning a herding breed :]
My Kelpie is the same - She fixates on cats. If she finds one she chases it until she loses it, or if it goes up a tree she won't leave unless I physically take her away.
With her it isn't a big issue as there's only one cat on the farm and I just keep her away.
I ahve taught our home dogs the 'leave it' command. It starts with food - Put a treat in your closed fist and hold it out to the dog. Let them sniff, lick etc and try to get it - The second they pause to think or stop trying, say 'Good!' or a different marker word, and give the treat. When they get the hang of it, start usign the command, 'Leave it' in an authoritative voice, and holding the treat on an open palm. If they try to take it close the hand, until the stand and watch it without taking it, then marker word and reward.
From there move onto putting the dog into a drop or sit (I prefer drop) and placing the food on the ground in front of them and saying 'Leave it!' - My command to allow them is 'Take it" - So they leave it until I say take it, which is the reward.
You can then move up to taking them for walks with 'obstacles' - I.e. shopping bags, soccer ball, etc, and walking past and saying 'Leave it' and keeping their attention so they don't sniff. Mark and reward. Eventually, hopefully, if you catch her quick enough you will be able to get her attention with 'leave it' and then occupy her with something else until the cat is gone.