Google accepted the challenge and developed gadgets for some its services. The Google News gadget displays news from the most important sections inside tabs.
There's also a gadget for YouTube that shows videos from sections like "most viewed today", "most discussed today" or "recently featured" and allows it to play the videos inside the gadget.
Another gadget lets you browse Google's directory of gadgets and preview them without opening a new page. It's cool that you can preview more than one gadget at the same time, so you can use it to compare similar gadgets.
It will be interesting to see if Google builds mini versions for other services that go beyond showing a bunch of links. For example, the Gmail gadget could let you preview your messages, reply to a mail inside the gadget or show the recent messages for each of your labels.