How to create a widgetized sidebar for every category dynamically?

Not a good thing if you have a lot of categories, so be careful!

First, add the following function in functions.php:

add_action( 'widgets_init', 'generate_widget_areas' );

function generate_widget_areas() {

//Do not create for uncategorized category
$terms = get_categories('exclude=1&hide_empty=0'); 

foreach ($terms as $term) {
   register_sidebar( array(
    'name' => 'Category '.$term->name,
    'id' => $term->slug.'-widget-area',
    'description' => 'Widget area for category and posts in '.$term->name,
    'before_widget' => '<li id="%1$s" class="widget-container %2$s">',
    'after_widget' => '</li>',
    'before_title' => '<h3 class="widget-title">',
    'after_title' => '</h3>'    ) );
  }
}

This is enough, now in Widgets you have a widget area for every category. Now you have to show the area for the category. I like to display the area for categories listings (categories posts listings) and the same area for posts using the category as well (single posts pages).

In sidebar.php, add:

<?php if (is_category() ||is_archive()||is_single()) : ?>
<div id="categories" class="widget-area" role="complementary">
<ul class="xoxo">
  <?php
   $category = get_the_category();
   if (in_category($category[0]->slug) || is_category($category[0]->slug)){
        dynamic_sidebar( $category[0]->slug.'-widget-area' );
    };
   ?>
</ul>
</div><!-- #categories .widget-area -->
<?php endif; ?>

That’s all, I bet someone can came up with a better code, by now this does the trick.