I've had several requests about how I created and linked my Blog friends list through a picture in my side bar. I thought it might be easier to answer in a post. It's a simple way to organize and de-clutter your blog as well as highlight the blogs you enjoy following. It's really pretty easy to do.
1.Create a blog (I created this one - My Favorite Blogs and Links) for the single purpose of housing your lengthy link lists - ie: bloggy friends, homeschool resources, book reviews, etc. In that blog create posts of whatever you want - ie: Blog Friends. I turned off the comments for this blog as it's a personal resource blog.
2. Find a picture that you would like to use in your sidebar. Blogger will allow you to upload one from your computer or the web.
3. Then go to the "layout" section of your blog where you want to post the picture (not your link blog) and click on the "add a gadget" feature. When that pops up, click on the "picture" option.
4. Within the picture widget, you will see the section: "image". Go there and upload the photo of your choice. Remember to click the "shrink to fit button" as the picture will need to fit in your side bar.
5. Once the picture is uploaded, link your post from the new blog (ie - blog friends) to the picture by pasting the link into the "link" area of the picture widget. You can also add a title or caption too. For mine, I added the caption (click on picture) to help visitors know how to access the pictures.
6. Click the save button and it will be saved to your sidebar. Move it to wherever you would like in your sidebar and save again. Congrats - you're done!