“Widgets” is just a buzzword for the functionality built into WordPress that allows you to customize the sidebar of your WordPress site without knowing HTML. You can use widgets to add a list of recent photos, comments, flickr photos, links, and much more. You can find your widgets in the Appearance > Widgets subtab. You may also get access to more widgets as you activate new plugins, for many of the plugins available have an associated widget, such as flickrRSS.

[youtube]http://www.youtube.com/watch?v=4V3oCDgWrIE[/youtube]