Advanced Most Recent Posts Widget displays your recent posts with thumbnail images (optional). It gets posts from selected categories or current category or all categories. When your visitors are at home, it gets posts from all posts or selected category. If you set 'Get posts from current category', when visitors see single post, widget lists posts in the same category of single post or when visitors click a category link, it gets posts from current category.
Check out a brand new plugin inspired by this one:
Mini Loops
I'm bad at support (not intentionally). If you have questions: check the forums, then check
my blog post's comment thread. If that doesn't work, post to the forums (there are awesome volunteers out there!) and get my attention by pinging me on twitter
@trepmal.