Well, if you notice that a Label Cloud is added in this blog, you may wonder how to create that. It is simple when you follow such an excellent post. :) Enjoy it.
http://phy3blog.googlepages.com/Beta-Blogger-Label-Cloud.html
Now the question is why Google does not provide it as a default widget.
Forgot to share with you something important. Do you know how to tune it so the theme matches?