Great plugin and it does "work" but a few problems:
1) The show children button does not work. If I have a post open, it does not show the categories and children for that post.
2) Unless you put in the actual entries for options in the widgets, none of the defaults work. For example, sorting will not work unless you put in ASC. If you put in the wrong term... odd things will happen. :)
3) Cannot get the post categories to work, showing the list of the posts's categories. This one is very close to working perfectly. Just fix these few issues and this is the pure winner for category arrangement.
Suggestion - some formatting options for displaying categories, e.g. to include a little button, arrow or whatever to indent the categories and make them stand out more other than just being listed. Very well done.