As noted in a few topics here, this plugin has broken thumbnails on a multisite install.
The fix is a simple modification to the advanced-recent-posts-widget.php file.
Just update the get_image_path function with the following:
function get_image_path ($src) {
global $blog_id;
if(isset($blog_id) && $blog_id > 0) {
$imageParts = explode('/files/' , $src);
if(isset($imageParts[1])) {
$src = '/blogs.dir/' . $blog_id . '/files/' . $imageParts[1];
}
}
return $src;
}
Hope this helps some of you!
http://wordpress.org/extend/plugins/advanced-recent-posts-widget/