How to do taxonomy based css styling using template.php?
The reason it is not called is because hook_preprocess_variables is for Drupal 5: you should use hook template_preprocess_page in Drupal 6.

So if your theme is called "mytheme", the function would be best named "mytheme_preprocess_page" in your template.php.



Also, Drupal and the Taxonomy modules already generate many body classes, so you should check out what classes already exist because it may be that you don't need to preprocess the page at all (if all you want is to add a body class depending on taxonomy).