This is not really anything new, but I have to say it: Microsoft's decision to name small specialized desktop applications that show up on Vista's desktop (or Windows Live) "Microsoft Gadgets" is poor for at least two reasons.
1. Everyone else calls these types of applications "widgets". Yahoo's Konfabulator and Apple call it that, why couldn't Microsoft simply adopt the name? They didn't invent anything new, it's the same thing. If copyright issues were involved, they could have invented some variation of the word, or a completely new word - it's what all the new web 2.0 companies do.
2. The word "gadget" already has a widespread meaning in the IT world - an often small mechanical or electronic device with a practical use. Using that name for something completely different only causes confusion.
It's not the end of the world, but it's annoying, it's confusing, and - most importantly - when two different things have the same name, it's harder to distinguish among them when you use search engines. Lesson to software developers: don't try to take over the word.