The LinkBlock widget arose from high dissatisfaction with the default WordPress blogroll widget, which displays all links from all categories. Early in WP 2.x development, this was easy to address – unfortunately, later editions of WP altered the way link categories worked, and LinkBlock hasn’t quite caught up yet, but it’s still highly useful.
As a widget, it allows you to provide a title, and specify which link category you want displayed, and it allows you to instantiate the widget multiple times to display multiple categories in your widget areas.