Best Related Posts is a straight forward and easy to use plug in. It shows related posts for the post user is reading. It also add the first picture in post as thumbnail beside the related post.
It is better than other plugins and widgets as it is good for internal link building and overall pagerank. it Lets you to design the look of your related posts list. It lets to write your own HTML and gives you access to some tags (link, title, image etc)
This plugin is available for download for your site.