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Error on activation: "Parse error: syntax error, unexpected T_CLASS..."

Make sure your host is running PHP 5. Add this line to wp-config.php to check:

var_dump(PHP_VERSION);

How do I define a custom taxonomy?

Try the Simple Taxonomies plugin.

Is there a template tag I can use instead of widgets?

You can use the_widget(), like so:

the_widget('Taxonomy_Drill_Down_Widget', array(
    'title' => '',
    'mode' => 'dropdowns',
    'taxonomies' => array( 'post_tag', 'color' ) // list of taxonomy names
));

'mode' can be one of 'lists' or 'dropdowns'

How can I customize the display?

The template hierarchy for multitax queries is taxonomy.php -> archive.php -> index.php.

If you need to get specific, you can use the is_multitax() conditional tag, which works similarly to is_tax():

is_multitax()

-> true if more than one taxonomy was queried

is_multitax( array('tax_a', 'tax_b') )

-> true if both tax_a and tax_b were queried