The Category Tagging plugin by Michael Woehrer offers an easy way to generate tags by utilizing the built-in category feature of WordPress. The plugin includes a tag cloud that can be displayed in your sidebar by inserting PHP code.

I have become a big fan of widgets, especially for my clients who do not have HTML/PHP knowledge. Widgets provide more flexibility to the site owner for repositioning and displaying sidebar data. I created a widget to compliment Michael’s plugin. The widget will display the tag cloud in your side bar, once activated. Download the Category Tagging widget.