A recent article on computerworld.com explains a little something about The Widgetization of the Web:
While the dot-com era focused squarely on aggregating data on the Internet, one of the most defining characteristics of Web 2.0 is the deconstruction of the Web into small, single-purpose applications called widgets or gadgets.These small chunks of code can either run on a desktop or be inserted into Web pages. Widgets are gaining popularity among consumers because they allow virtually anyone to easily customize a Web page or social network with news, weather, podcasts, video and other content. Anytime a YouTube video, for example, is added to a non-YouTube page, it becomes a widget.
I guess the key aspect really is that consumers can put on their websites whatever chunks of content they desire. Widgets become extremely powerful when consumers decide to place stuff in widgets that they like and that they would recommend.
