Here’s a Ma.gnolia widget for WordPress. It is a lot like my twitter widget in how it displays your bookmarks with tasteful XHTML code.
The code is heavily commented and the output is in template functions so everything is fully customizable. Again, the widget works just like any other good widget. Be sure to set the preferences for your username. The readme provides more details.
The XML is parsed using the SimpleXML PHP extension so PHP >= 5.0 is required. I may rewrite this using the DOM XML in the future but the code is a lot cleaner this way. And you should be upgrading to PHP 5 anyways 
