BBD uses a lot of labels. Each blog submitted uses labels supplied by the blogger and I add some administrative ones. I also label the posts I write. The number of labels is growing exponentially.
The Labels Widget in the sidebar was becoming too long. Blogger uses unordered lists (<ul> <li></li> </ul>) to manage labels so the easiest solution was to find the template section I needed and remove the <li> and </li> markers. Doing so changed the list into a paragraph.
The labels paragraph changes to fit the location the widget is placed in. It is wider if placed in the footer and narrower in the sidebar. Now my labels are more manageable.
The image below shows the section of the template that has to be changed. Always backup your template before making changes.
Thanks to Belle for the idea.