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.

<style type='text/css'>
#menu11 {
   width: 200px;
   margin: 10px;
   border-style: solid solid none solid;
   border-color: #889944;
   border-size: 1px;
   border-width: 1px;
   }

#menu11 ul {
   list-style: none;
   margin: 0;
   padding: 0;
   }

#menu11 img {
border: none;
}

#menu11 li a {
   height: 32px;
     voice-family: &quot;\&quot;}\&quot;&quot;;
     voice-family: inherit;
     height: 24px;
   text-decoration: none;
   }

#menu11 li a:link, #menu11 li a:visited {
   color: #889944;
   display: block;
   background:  url(http://1.bp.blogspot.com/_4HKUHirY_2U/Sw9Jt_oc2eI/AAAAAAAAAWk/lkgdevg2ixQ/menu11.gif);
   padding: 8px 0 0 25px;
   }

#menu11 li a:hover, #menu11 li #current {
   color: #889944;
   background:  url(http://1.bp.blogspot.com/_4HKUHirY_2U/Sw9Jt_oc2eI/AAAAAAAAAWk/lkgdevg2ixQ/menu11.gif) 0 -32px;
   padding: 8px 0 0 27px;
   }
</style>

Note :Please Host menu11.gif yourself.

4.Now save your template.

5.Go to Layout-->Page Elements and click on "Add a gadget".

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

<div id="menu11">

<ul>
    
<li><a id="current" href="#">Home</a></li>

<li><a href="#">HTML</a></li>

<li><a href="#">CSS</a></li>

<li><a href="#">JavaScript</a></li>

<li><a href="#">Templates</a></li>

<li><a href="#">About</a></li>

<li><a href="#">Contact</a></li>

</ul>

</div>

You are done.

Demo