Show Latest Post from External Website, with Featured Image
 

Hi,

I'm looking for a plugin to can be used on my sidebar to show latest posts from external website, including the featured image.

Any good recommendations?

you might try a feed aggregator.
http://wordpress.org/extend/plugins/feedwordpress/

I think that one works differently. Basically it grabs the external rss and post it as standard post in your blog.

This is something useful, but it has no featured image http://wordpress.org/extend/plugins/wp-rss-aggregator/