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I think what you want is another plugin that will let you control widget visibility. Widget Context looks like a good one.

Okay,

I think ideally you’d want a shortcode, right? Unfortunately, this plugin doesn’t come with one, but there is a template tag you could use in your template: <?php yg_recentposts($params); ?>. Maybe the plugin’s homepage will shed a little light?

I’ve got my own mod of this plugin, I’ll see if I can add a shortcode feature to it – if I can, I’ll try to release it as its own plugin.

Using <?php yg_recentposts($params); ?> for now is probably the way to go, you can specify your excerpt length, image, and all the other options available in the widget inside $params (like $params = array('limit'=>3, 'excerpt'=>150, 'firstimage'=>true);) then include that inside a conditional statement so it only shows on the front page.

I’ll try to make some time to work on a shortcode-enabled version and make that available.

The code will look something like this, depending on the options you want:
These params indicate 3 posts, 150 characters long, with an image 50×50

<ul><?php
    if (is_front_page()) {
        $params = array('limit'=>3, 'excerpt'=>150, 'firstimage'=>true, 'w' =>50, 'h' => 50 );
        yg_recentposts($params);
    }
?></ul>

This should go either in the index.php file (if your front page has posts) or page.php (if you have a static front page) wherever it is in the HTML you want the recent posts list to appear.

Perhaps you could copy the contents of welcome.php and put it on codepad.org? then post the link here so I can take look at the code see if there’s anything obvious.

Sorry, I think I wasn’t clear, you’ll want to add that snippet to the actual theme file.

Go to Appearance > Editor
Select your active theme from the drop down menu.
Choose Page Template (page.php) [some themes may use a different file]
Add the snippet to that file [I’d look for ‘the_content(‘..’)’ and add it just below that]

Screenshot: http://cl.ly/2KMB

Here’s how I would add it: http://codepad.org/xHZbwkHh

If it’s not showing up, it’s possible that the Welcome page is set to use a non-default template. If you go edit the Welcome page, does it show anything selected for the Template? screenshot