1.Log in to your dashboard--> layout- -> Edit HTML

2.Without "Expand Widget Templates",Scroll down to where you see this:-

    <b:section class='sidebar' id='sidebar' preferred='yes'>

3.Now Paste the below codes immediately after the above code.

    <b:widget id='Label99' locked='false' title='Labels' type='Label'>
    <b:includable id='main'>
    <b:if cond='data:title'>
    <h2><data:title/></h2>
    </b:if>
    <div class='widget-content'>

    &lt;object type="application/x-shockwave-flash" data="http://halotemplates.s3.amazonaws.com/wp-cumulus-example/tagcloud.swf" width="250" height="200" allowscriptaccess="always" &gt;
    &lt;param name="movie" value="http://halotemplates.s3.amazonaws.com/wp-cumulus-example/tagcloud.swf" /&gt;
    &lt;param name="bgcolor" value="#ffffff" /&gt;
    &lt;param name="flashvars" value="tcolor=0x000000&amp;mode=tags&amp;distr=true&amp;tspeed=100&amp;tagcloud=&lt;tags&gt;
    <b:loop values='data:labels' var='label'>
    <a expr:dir='data:blog.languageDirection' expr:href='data:label.url' style='12'><data:label.name/></a>
    </b:loop>
    &lt;/tags&gt;" /&gt;
    &lt;p&gt;Blogumulus by &lt;a href='http://www.roytanck.com/'&gt;Roy Tanck&lt;/a&gt; and &lt;a href='http://www.bloggerbuster.com'&gt;Amanda Fazani&lt;/a&gt;&lt;/p&gt;
    &lt;/object&gt;


    </div>

    <b:include name='quickedit'/>
    </b:includable>
    </b:widget>


4.Click on "Save Templates" and Refresh your site.
Note: You can change the width and height of the Widget by changing the values in green in the code. You can also change the background color.