I am testing Hackosphere hack for Drop-down labels - First blogger beta template hack! with Best Gardening Articles. It works. You can see the drop-down menu for the labels in the right sidebar.
Some tips for using this hack. First, backup your current template. See Backing and changing New Blogger template. Remember also to edit the Page Elements one-by-one, copy them into Notepad files, give them a suitable name like "blog name hit counter footer no 1" and save them in the same folder where you save the backup template.
Now it is best that you are using a browser like FireFox with tabbed browsing so you can be in Hackosphere page in one tab and in the Blogger page in another tab, all in the same window. Sign into Blogger, and in the Dashboard, click LAYOUT, then click the TEMPLATE tab followed by the EDIT HTML sub-tab. This will open your template editor window. Tick "Expand widgets template" and wait for the template to fully expand. You will then have to look for the block of codes as explained in Hackosphere page. To make your life simpler, press ctrl+F and you will see a "Find" search box at the bottom of the page. I would suggest you type or copy-paste all or part of
<b:widget id='Label1' locked='false' title='Labels' type='Label'>
into the search box and click "Find Next". This will automatically locate your search term and highligh it. Then somewhere below, you will see <ul>. Highlight all the codes between this tag and </ul> and delete it. Then paste what Hackosphere instruct you to replace all the highlighted (and deleted) codes with their replacement. Preview, and if satisfied, click "Save template".