Majority of WordPress themes supports widgets. Widgets are WordPress Plugins. After installing a plugin on the WordPress blog, you can active your widget to give more functionality to your blog.
Widgets are usually placed at the sidebar of the blog. Some themes also supports footer and front page widgets.
You can configure and change your sidebar or footer widget content via the WordPress admin panel.
They can be added, removed, and rearranged on the WordPress Administration Appearance > Widgets panel.
How to create a text widget?
When you are in Widget window you can create text widget, delete, rearrange the order, make it inactive widgets however you like.
A text widget can be plain text or an HTML code. If you like to display an image on your sidebar you could use HTML code to show it.
With a simple HTML code, it is easy to create a text widget that will advertise an image.
To do so first you need to upload an image to your blog, then copy the image address. You should also specify the image width and height to display the image correctly. The image can have a link. When a visitor click on the image, it can direct to a specified website or it can open a larger version of the image as well as another photo.
<p align=”center”><a href=”http://www.anyexternallink.com” target=”_blank”><img src=”http://www.yourwebsiteaddress.com/wp-content/uploads/2012/06/imagename.png” width=”162″ height=”215″ alt=”name of image” title=”give a meaningful title here” /></a>
After you wrote the code, click on save button, then your widget will display on your sidebar.
Beside the text widget you can add, calendar, custom menu if you have a lot of post you can add your categories ito widget area as drop down menu, RSS feed, social media buttons, such as Twitter, Facebook, Google Plus, etc. You can download some other free or paid plug ins to add functionality into your blog. Subscribe email, sidebar contact form, membership form, photo slideshow, rotating advertisement and many more.
To active any WordPress Theme Widget in your dashboard navigation menu:
Click on Appearance button, then Widgets.
To arrange the Widgets within the sidebar or Widget area, click and drag it into place.
To customize the Widget features, click the down arrow in the upper right corner to expand the Widget’s interface.
To save the Widget’s customization, click Save.
To remove the Widget, click Remove or Delete.
There are many plugins , widgets at wordpress.org website to choose from.
Just make sure that when you are installing a plugin, it should be compatible with your version of WordPress blog.
Read more info here: http://wordpress.org/extend/plugins/