Grouped Links Widget can use an unlimited number of widget instances to group links by their associated link categories.
Grouped Links Widget can use any number of widget instances to group links by their associated link categories. This adds a bit more CMS functionality to WordPress.
If the blogroll is grouped into link categories and each category contains internal tag references, then you can flexibly group link categories and put these link groups into your sitebar(s). This, of course, works with traditional external links put in a blogroll too.
Each group of link categories can be sorted by name acending or decending. If simple sorting doesn't fit to your desired order to be appear in the sidebar, then create more than one link group and place them in the sidebar as you wish.
In order to adapt Grouped Links Widget to different HTML theme codes, HTML tags can be set for each link group and for each title within the link group. However, default values should work with most themes.
Grouped Links Widget is a simple widget, it mainly uses wp_list_bookmarks. Version 2.0 was completely refactored in order to adapt to the new WordPress 2.8 multi widget technique. If you want to add more functionality, don’t hesitate to modify the code. ;-)
Grouped Links Widget's homepage: http://groupedlinks.wordpress.com/