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Just drop the file "simple-tagging-widget.php" from the zip-file into your plugin directory and activate the plugin. Then go to the "Themes"->"Sidebar Widgets" panel and drag-and-drop the "Simple Tagging Tag Cloud" box into your sidebar, configure options and save. The tag cloud will be shown in the sidebar after that. The basic options from the Simple Tagging plugin tag cloud are taken. If you want to use individual options for the sidebar tag cloud, you can choose them in the Sidebar Arragement panel as well.