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The images are wrapping into only one column. There is too much white-space to the right of the images.

As the width of sidebars varies between themes, you might have to adjust the default width of 100 pixels to get the images to wrap perfectly. You can adjust the width in the widget's 'Image Template' option. Lower the width if images are wrapping into one column. And increase the width if there is too much white-space on the right side. For example, the Twenty-Ten theme works best with 95px width.