Get Recent Comment wordpress plugin shows excerpts of the latest comments, it also can (optionally) separate the trackbacks/pingbacks from the comments.

If you don’t want to use any wordpress plugin to display recent comments, you can copy the following coding and paste it to the sidebar.php file. To change the number of displayed comments, simply change the LIMIT “10″ to your desired number.

<?php
global $wpdb;
$sql = "SELECT DISTINCT ID, post_title, post_password, comment_ID,
comment_post_ID, comment_author, comment_date_gmt, comment_approved,
comment_type,comment_author_url,
SUBSTRING(comment_content,1,30) AS com_excerpt
FROM $wpdb->comments
LEFT OUTER JOIN $wpdb->posts ON ($wpdb->comments.comment_post_ID =
$wpdb->posts.ID)
WHERE comment_approved = '1' AND comment_type = '' AND
post_password = ''
ORDER BY comment_date_gmt DESC
LIMIT 10";
$comments = $wpdb->get_results($sql);
$output = $pre_HTML;
$output .= "\n<ul>";
foreach ($comments as $comment) {
$output .= "\n<li>".strip_tags($comment->comment_author)
.":" . "<a href=\"" . get_permalink($comment->ID) .
"#comment-" . $comment->comment_ID . "\" title=\"on " .
$comment->post_title . "\">" . strip_tags($comment->com_excerpt)
."</a></li>";
}
$output .= "\n</ul>";
$output .= $post_HTML;
echo $output;?>

Thanks to WPHacks for this awesome coding.