A lot of people have requested highlighting dates with events, but it's a feature that needs to be thought through carefully. The calendar widget works on the client side only, meaning it runs asynchronously to the event database. The only way to get it to work would be to "preload" the calendar with a huge array of dates that have events, which has two major limitations 1) you have to pick an arbitrary date range to preload, and 2) Major performance hit. The only option that seems worthwhile to me is to generate the calendar with AJAX, in which case the widget would have its own template and you could do something like your second request -- create your own version without the week selection buttons.

Yup. Use LiveCalendarWidget.

I used the event calendar widget. is this the same as LiveCalendar widget?

Thank you Uncle Cheese. It worked wonders. I am now trying to change the colors to match the event calendar module. Is there an easy way to do this? and is there a way to resize the calendar?