I wrote a post a while back detailing how easy it was to add a Login Box to your template. But, it’s even easier, it turns out, to add one to your sidebar.
Sidebar Login is a plugin that will let you throw a quick sidebar login box onto your site. And, it’s AJAX compatable, which means that it logs the user in seamlessly and then displays typical “user” account options (profile, logout, etc).
Install the plugin and then drag the widget to your sidebar to install it.