Up until lately I was using some scrolling script to save space...listing icon links for blogroll, sponsors, etc. That worked well, but I found a plugin called "Sponsors Slideshow" and I like it even better! A little cleaner, and much easier to manage/organize. With the scrolling script...I was using the standard "text" widget, and listing all my image links inside. They were getting long, and sometimes I was posting a button more then once.
If you have wordpress, installing the plugin is as simple as clicking a button. Once installed...it works off of "Links". Make as many link categories as you need, for example I have....Mama Blogroll, Sponsors, Coupons, Linkys. Fill in the "Add new link" as usual; include the image url, and make sure to click on 'open in a new window'. Save your links as usual. Add the widget wherever you need it, and set it's perimeters. It has lot of different effects to choose from, like slide, scroll, fade, curtain, etc.
Sponsors Slideshow makes it easy to add, remove, and update buttons, and your sponsored advertiser links! I assume it could also be used as a regular slideshow for photos....linking to individual Flickr photos, etc. The only thing that sucks about it, is there's no way to set image size. So you'll have to be careful about linking to images that too large! Otherwise, it rocks!