“Gadgets — which are basically interactive and dynamic mini-billboards — are one of the fastest growing applications at Google,” stated Samantha Crow, Product Marketing Manager at iGoogle. “They’re the foundation for iGoogle, the personalized version of the Google homepage that has tens of millions of users. They can also be included on most any page on the web with some simple copy-and-paste.”
Google Gadgets are widgets that you can add to iGoogle. iGoogle is a personalized start page where users can aggregate RSS feeds. Now anyone with a website can create a Gadget using Google Gadget Builder.
Google Gadget Builder encourages users to submit their gadgets to the iGoogle directory when completed too. Google can feature information about your website via blog updates, YouTube video channels, polls, speeches, etc.
For more information, check out the Google Gadget Center.
 The Official Google Blog: Gadgets for a cause by Samantha Crow