I recently added a new plugin to display the latest post within a category; there must be another one out there but I coudn't find it, so I hacked my own. I plan to upload it to WP's plugin repository (some day) so I may as well use this post a man page (?)
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Download the plugin from // TODO
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Unzip / untar the file in wp-content/plugins
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Enable the new plugin
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Configure the category to be searched (in my case I used "Vim Tips") in the settings tab
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Add the plugin as a widget (or copy&paste the code as needed, it's in the readme)
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Post something within the new category, if there's nothing
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The excerpt from the post and its title will be displayed in the sidebar (or wherever you configured the new plugin)
Easy to use. Hope you like it.