1.Login to your blogger dashboard--> layout- -> Edit HTML

2.Scroll down to where you see </head> tag .

3.Copy below code and paste it just before the </head> tag .

<script src='http://ajax.googleapis.com/ajax/libs/jquery/1.3.1/jquery.min.js' type='text/javascript'/>
<script type='text/javascript'>

//<![CDATA[

(function($){$.fn.innerfade=function(options){return this.each(function(){$.innerfade(this,options)})};$.innerfade=function(container,options){var settings={'animationtype':'fade','speed':'normal','type':'sequence','timeout':2000,'containerheight':'auto','runningclass':'innerfade','children':null};if(options)$.extend(settings,options);if(settings.children===null)var elements=$(container).children();else var elements=$(container).children(settings.children);if(elements.length>1){$(container).css('position','relative').css('height',settings.containerheight).addClass(settings.runningclass);for(var i=0;i<elements.length;i++){$(elements[i]).css('z-index',String(elements.length-i)).css('position','absolute').hide()};if(settings.type=="sequence"){setTimeout(function(){$.innerfade.next(elements,settings,1,0)},settings.timeout);$(elements[0]).show()}else if(settings.type=="random"){var last=Math.floor(Math.random()*(elements.length));setTimeout(function(){do{current=Math.floor(Math.random()*(elements.length))}while(last==current);$.innerfade.next(elements,settings,current,last)},settings.timeout);$(elements[last]).show()}else if(settings.type=='random_start'){settings.type='sequence';var current=Math.floor(Math.random()*(elements.length));setTimeout(function(){$.innerfade.next(elements,settings,(current+1)%elements.length,current)},settings.timeout);$(elements[current]).show()}else{alert('Innerfade-Type must either be \'sequence\', \'random\' or \'random_start\'')}}};$.innerfade.next=function(elements,settings,current,last){if(settings.animationtype=='slide'){$(elements[last]).slideUp(settings.speed);$(elements[current]).slideDown(settings.speed)}else if(settings.animationtype=='fade'){$(elements[last]).fadeOut(settings.speed);$(elements[current]).fadeIn(settings.speed,function(){removeFilter($(this)[0])})}else alert('Innerfade-animationtype must either be \'slide\' or \'fade\'');if(settings.type=="sequence"){if((current+1)<elements.length){current=current+1;last=current-1}else{current=0;last=elements.length-1}}else if(settings.type=="random"){last=current;while(current==last)current=Math.floor(Math.random()*elements.length)}else alert('Innerfade-Type must either be \'sequence\', \'random\' or \'random_start\'');setTimeout((function(){$.innerfade.next(elements,settings,current,last)}),settings.timeout)}})(jQuery);function removeFilter(element){if(element.style.removeAttribute){element.style.removeAttribute('filter')}}

//]]>

</script>
<script type='text/javascript'>
$(document).ready(
function(){
$(&#39;#news&#39;).innerfade({
animationtype: &#39;slide&#39;,
speed: 750,
timeout: 2000,
type: &#39;random&#39;,
containerheight: &#39;1em&#39;
});

$(&#39;ul#portfolio&#39;).innerfade({
speed: 1000,
timeout: 5000,
type: &#39;sequence&#39;,
containerheight: &#39;220px&#39;
});

$(&#39;.fade&#39;).innerfade({
speed: 1000,
timeout: 6000,
type: &#39;random_start&#39;,
containerheight: &#39;1.5em&#39;
});

$(&#39;.adi&#39;).innerfade({
speed: &#39;slow&#39;,
timeout: 5000,
type: &#39;random&#39;,
containerheight: &#39;150px&#39;
});

});
</script>

4.Now go to Layout-->Page Element and click on "Add a gadget".

5.Select "html/java script" and add the code given below and click save.

<div style="background-color:#fffeb8;height:50px;padding:5px 1px;border-style:solid;border-width:2px;">

<ul id="news" style="style="list-style-type:none;">

<li><a href="#">A Smart jQuery Multi Tab Widget For Blogger</a></li>

<li><a href="#">How To Add jQuery Tab View Widget To Blogger</a></li>

<li><a href="#">How To Add jQuery Horizontal Dropdown Menu to Blogger</a></li>

<li><a href="#">How To Add jQuery Horizontal Sub Navigation to Blogger</a></li>

<li><a href="#">How To Add MooTools Link Fading To Blogger</a></li>

<li><a href="#">How To Add jQuery Scroll To Top Link To Blogger</a></li>

<li><a href="#">How To Add jQuery Scroll To Top Button To Blogger</a></li>

<li><a href="#">How To Add jQuery Scroll Background To Blogger</a></li>

</ul>

</div>

You are done.