I've just seen your post here, I suspect that you found a solution. All the same, to edit the default widgets you need to edit the wp-includes/widgets.php file, there for cats, is the function`function wp_widget_categories($args, $number = 1) {
extract($args);
$options = get_option('widget_categories');
$c = $options[$number]['count'] ? '1' : '0';
$h = $options[$number]['hierarchical'] ? '1' : '0';
$d = $options[$number]['dropdown'] ? '1' : '0';
$title = empty($options[$number]['title']) ? __('Categories') : $options[$number]['title'];
echo $before_widget;
echo $before_title . $title . $after_title;
$cat_args = "orderby=name&show_count={$c}&hierarchical={$h}";
if ( $d ) {
wp_dropdown_categories($cat_args . '&show_option_none= ' . __('Select Category'));
?>`
this must be what you were editing? you could duplicate this, rename it adjust it to your liking then what.. I'm not sure, maybe someone could fill us in.