Google Desktop Gadget Designer
It seems like the guys at Google have leapfrogged the capabilities of Yahoo! Widgets by providing a Gadget Designer:
The Google Desktop Gadget Designer is an integrated development environment (IDE) for Sidebar gadget design that lets you quickly prototype or modify your gadget's UI and test its performance. This document assumes familiarity with the principles, objects, and interfaces described in the Sidebar Scripting API document and the Sidebar Gadget Design Guidelines. Here, we only explain how to use the Designer and do not go into any detail about object or property types, design guidelines, how gadgets are packaged for Sidebar use, how to write associated scripts, etc. (Link)
I’m still loyal to Konfabulator Yahoo! Widgets but the addition of an IDE certainly lowers the bar and makes Gadget development attractive.