Ed Bott leaps into the widget versus gadget discussion with “The Widget-Gadget Food Fight”.
Gadgets were announced during Jim Allchin's keynote at the PDC. Gadgets are (from the Windows Gadget site):
Gadgets are a new category of mini-application designed to provide information, useful lookup, or enhance an application or service on your Windows PC or the Web. Examples might include a weather gadget running on your desktop or on your homepage, an RSS Gadget that pulls in your favorite feeds, or an extension of a business application providing just-in-time status on the pulse of your business.
Check out the Windows Gadget Site.