Using the NextGen Gallery plugin gives you a lot of flexibility in how you display your images and provides a handy sidebar slideshow widget. See the Help Wiki page on NextGen Gallery for instructions on setting it up.
Advantages: Lots of options. Sidebar slideshow.
Disadvatages: Complicated to configure. Images are stored locally so you are restricted to 100MB. Can’t export your images if you ever want to move your site.
Image List:
Slideshow:
Imagebrowser: