removing items from side bar

To remove cats, delete this:
<li id="categories"><?php _e('Categories:'); ?>
To add things that can’t be done with the link manager, you can just paste the necessary code into place.
It’s better to use the right css though, as this means it can be styled better and easier. It will also be consistently indented.
If you give an example of what you want to include – even by just posting it on your blog, then we’ll help with the css tags.

You can also just hide the categories if you’re not comfortable with editing the index.php file, but you have to edit the CSS file (wp-layout.css) and add this to the end of the file:
#categories { display: none; }

i didnt have anything in mind yet for adding but i know something would come in mind within the next few weeks.