Grouping your posts by categories

Here they describe the major thoughts on how to arrange this...
Basically:

1. Add labels to your posts (you do that on the screen where you edit your posts...).
2. Go to Design-->Layout and click "Add a Gadget" wherever you want to add it. For instance, in the image below, before we add what shows on the image as "Categories", we had something on its place like the "Add a Gadget" on the right.

3. Select Link List. 
4. Filling in the information is quite straightforward. See this example:
   
   The only question could be where does one get the address... Basically, when you click on the label, all the posts with that label show up on the page. Copy it from the browser address bar.

Rest should be straightforward...