You have added this layout update via admin side. The layout update that you are used actually will create a new category view section under content section along with the default one.
There are two types of categories basically
Depending upon the type of category, Magento uses two desperate layout handles for them. For default categories, it uses catalog_category_default
and for catalog_category_layered
. These two layout handles will not process simultaneously.
Now Magento defines this layout handles in catalog.xml
file. So take a look on these handles over there
File : app/design/frontend/<your_package>/<your_theme>/layout/catalog.xml
<reference name="content">
<block type="catalog/category_view" name="category.products" template="catalog/category/view.phtml">
<block type="catalog/product_list" name="product_list" template="catalog/product/list.phtml">
.....
</block>
.....
</block>
...
</reference>
(Above I showed only relevant sections)
Both of this layout handle already defines category-view block and product-list block over there.
Now, after processing the above layout update handle, then magento will take into consider your custom admin layout update that you have included via admin section. Your custom layout updation again do the same thing that is done by above mentioned layout handles here. That is why you are viewing two lists.
In order to avoid this, you need to refer blocks that are included through layout handles catalog_category_default
or catalog_category_layered
and then do customization then. That is you can refer a category-view block like this
<reference name="category.products">
<!-- custom udpates comes here-->
</reference>
Similarly product-list block can be refered as
<reference name="product_list">
<!-- custom udpates comes here-->
</reference>
So if you just need to set column via your custom update, then you can use this
<reference name="content>
<reference name="product_list">
<action method="setColumnCount"><columns>4</columns></action>
</reference>
</reference>
This will set column count for existing product list block that is defined via category specific layout handles, instead of new one.