CodeCanyon - Advanced Categories Widget | 500 KB
Want your WordPress categories widget with image? This categories widget for WordPress is an advanced widget that gives you total control over the output of your categories. Support multi-instances widget, category image, easy to customize and full features. When a category link is clicked, all the posts in that category will display on a category page using the appropriate category template dictated by the template hierarchy rules.
DEMO:
http://codecanyon.net/item/advanced-categories-widget/422878