I wanted a category cloud like those I've seen on other blogs and other sites. The new Blogger has a category listing feature, but nothing like a category cloud. Well, Google is your friend, so I went googling for 'blogger category cloud' and sure enough the first page contained a link to phydeaux3 and the provocative entry "Setup and configuration for New Blogger Tag Cloud / Label Cloud." Read phydeaux3's blog entry through first, then follow the directions, primarily cutting and pasting. The only thing I did was to change the title from 'Label Cloud' to 'Category Cloud', but that was it. Oh. One little gotcha about this interesting hack. If you go back in and edit in HTML mode then all the code in the Labels widget gets wiped out. If you edit the widget (change the title with the Blogger tool) the internal code gets wiped out. All the other code snippets hang around.
Just look to the right to see the results.