Widgets not working

your theme does not have widget support in sidebar.php; read this article from the codex to make it dynamic:
http://codex.wordpress.org/Function_Reference/dynamic_sidebar

already inserted into the sidebar.php code below:

<div id="sidebar">

<?php if ( !function_exists('dynamic_sidebar') || !dynamic_sidebar() ) : ?>

<h3>RECENT POSTS</h3>
<ul>
<?php get_archives('postbypost', 10); ?>
</ul>
<div id="sidebar_left">
<h3>Search</h3>
<?php get_sidebar_search_form(); ?>
<h3>Categories</h3>
<ul>
<?php wp_list_cats('sort_column=name&optioncount=0&hierarchical=0'); ?>
</ul>
<h3>Archives</h3>
<ul>
<?php wp_get_archives('type=monthly'); ?>
</ul>
<h3>Meta</h3>
<ul>
<?php wp_register(); ?>
<li><?php wp_loginout(); ?></li>
<li><a href="http://validator.w3.org/check/referer" title="This page validates as XHTML 1.0 Transitional">Valid <abbr title="eXtensible HyperText Markup Language">XHTML</abbr></a></li>
<li><a href="http://gmpg.org/xfn/"><abbr title="XHTML Friends Network">XFN</abbr></a></li>
<li><a href="http://Wordpress.org/" title="</li>
<?php wp_meta(); ?>
</ul>
</div>
<div id="as"><img src="<?php bloginfo('stylesheet_directory'); ?>/images/img3.jpg" /></div>

<?php endif; ?>

</div>