There are some changes to the parameters so WordPress Theme and WordPress Plugin authors should check their WordPress Themes in WordPress 2.1.
WordPress 2.1 now includes blogroll link categories in the post category list. The idea is to match content with blogroll links. The upgrade adds and changes database tables to accomodate this new feature, which may mess up your sidebar category links.
Theoretically, if you do not have any posts assigned to your blogroll categories, blogroll link categories will not appear in your categories list unless you have it set to "show all" categories and override the default settings.
If you do have post categories that matched your blogroll categories, you might have a bit of a mess. Hopefully, someone here will jump in with a solution on how to clean that up.
WordPress 2.1 should be backwards compatible with
wp_list_cats() but if you are having trouble, consider changing your sidebar template file (
sidebar.php ) to the new
wp_list_categories() template tag.