You do need to install Categories Dressing before you can use the advice above.If you do look in the readme, you will find this spelled out in detail.For Categories Dressing, see the sections in the readme titled...
You will not find a mod that will put buttons behind all of your sidebox links; all you need for sideboxes that use <ul> or similar lists are a few stylesheet rules. All of your current sideboxes do fall under that description, so adding rules like
.sideBoxContent li {background: url(../images/mycatbg.gif) no-repeat;}
.sideBoxContent li:hover {background: url(../images/mycatbghover.gif);}
should help you.
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