A tag cloud or label cloud for blogger is a visual depiction of all labels used on your blog.You can see a demo of the Label cloud for blogger(blogger label cloud) here on my site. This Tag Cloud Widget was originally developed by phydeaux3. This is a modded version of phydeaux’s Cloud. This is much better than the Blogger’s Default Label Cloud. First of all Go to Your blogger Layout > Page Elements page and add a Labels Widget there..You can Do that using the Add a Page Element Option on that page.After Adding the Label Widget Go to
Layout > Edit Html (Do not expand the widget templates for the sake of easy explanation) You will find some code similar to
Now Replace that with Now find and replace it with Save your template and now you should get a working Label Cloud On your Blog. You can Configure the Gadget from the Gadget Options 
Layout > Edit Html (Do not expand the widget templates for the sake of easy explanation) You will find some code similar to
<b:widget id='Label1' locked='false' title='Labels' type='Label'/>
<b:widget id='Label1' locked='false' title='Labels' type='Label'>
<b:includable id='main'>
<b:if cond='data:title'>
<h2><data:title/></h2>
</b:if>
<div expr:class='"widget-content " + data:display + "-label-widget-content"'>
<b:if cond='data:display == "list"'>
<ul>
<b:loop values='data:labels' var='label'>
<li>
<b:if cond='data:blog.url == data:label.url'>
<span expr:dir='data:blog.languageDirection'><data:label.name/></span>
<b:else/>
<a expr:dir='data:blog.languageDirection' expr:href='data:label.url'><data:label.name/></a>
</b:if>
<b:if cond='data:showFreqNumbers'>
<span dir='ltr'>(<data:label.count/>)</span>
</b:if>
</li>
</b:loop>
</ul>
<b:else/>
<div id='labelCloud'/>
<p align='center'>
<script type='text/javascript'>
var cloudMin = 1;
var maxFontSize = 30;
var maxColor = [35,130,196];
var minFontSize = 13;
var minColor = [35,130,195];
<b:if cond='data:showFreqNumbers'>
var lcShowCount = true;
<b:else/>
var lcShowCount = false;
</b:if>
// Don’t change anything past this point -----------------
// Cloud function s() ripped from del.icio.us
function s(a,b,i,x){
if(a>b){
var m=(a-b)/Math.log(x),v=a-Math.floor(Math.log(i)*m)
}
else{
var m=(b-a)/Math.log(x),v=Math.floor(Math.log(i)*m+a)
}
return v
}
var c=[];
var labelCount = new Array();
var ts = new Object;
<b:loop values='data:labels' var='label'>
var theName = "<data:label.name/>";
ts[theName] = <data:label.count/>;
</b:loop>
for (t in ts){
if (!labelCount[ts[t]]){
labelCount[ts[t]] = new Array(ts[t])
}
}
var ta=cloudMin-1;
tz = labelCount.length - cloudMin;
lc2 = document.getElementById('labelCloud');
ul = document.createElement('ul');
ul.className = 'label-cloud';
for(var t in ts){
if(ts[t] < cloudMin){
continue;
}
for (var i=0;3 > i;i++) {
c[i]=s(minColor[i],maxColor[i],ts[t]-ta,tz)
}
var fs = s(minFontSize,maxFontSize,ts[t]-ta,tz);
li = document.createElement('li');
li.style.fontSize = fs+'px';
a = document.createElement('a');
a.title = ts[t]+' Posts in '+t;
a.style.color = 'rgb('+c[0]+','+c[1]+','+c[2]+')';
a.href = '/search/label/'+encodeURIComponent(t);
if (lcShowCount){
span = document.createElement('span');
span.innerHTML = '('+ts[t]+') ';
span.className = 'label-count';
span.style.color = 'rgb('+c[0]+','+c[1]+','+c[2]+')';
a.appendChild(document.createTextNode(t));
li.appendChild(a);
li.appendChild(span);
}
else {
a.appendChild(document.createTextNode(t));
li.appendChild(a);
}
ul.appendChild(li);
abnk = document.createTextNode(' ');
ul.appendChild(abnk);
}
lc2.appendChild(ul);
</script>
</p>
<noscript>
<b:loop values='data:labels' var='label'>
<span expr:class='"label-size label-size-" + data:label.cssSize'>
<b:if cond='data:blog.url == data:label.url'>
<span expr:dir='data:blog.languageDirection'><data:label.name/></span>
<b:else/>
<a expr:dir='data:blog.languageDirection' expr:href='data:label.url'><data:label.name/></a>
</b:if>
<b:if cond='data:showFreqNumbers'>
<span class='label-count' dir='ltr'>(<data:label.count/>)</span>
</b:if>
</span>
</b:loop>
<br/>Powered By:<small><a href='http://www.bloggerplugins.org'>Blogger Gadgets</a></small>
<br/><small><a href='http://www.bloggerplugins.org/2008/06/label-cloud-widget-for-blogger-blogspot.html'>Label Cloud for Blogger</a></small>
</noscript>
</b:if>
<b:include name='quickedit'/>
</div>
</b:includable>
</b:widget>]]></b:skin>
#labelCloud {text-align:center;font-family:arial,sans-serif;}
#labelCloud .label-cloud li{display:inline;background-image:none !important;padding:0 5px;margin:0;vertical-align:baseline !important;border:0 !important;}
#labelCloud ul{list-style-type:none;margin:0 auto;padding:0;}
#labelCloud a img{border:0;display:inline;margin:0 0 0 3px;padding:0}
#labelCloud a{text-decoration:none}
#labelCloud a:hover{text-decoration:underline}
#labelCloud li a{}
#labelCloud .label-cloud {}
#labelCloud .label-count {padding-left:0.2em;font-size:9px;color:#000}
#labelCloud .label-cloud li:before{content:"" !important}
]]></b:skin>