Sidebar widgets is the new big thing for the hosted blog service at WordPress.com.
The new addition allows for the customization of the blog sidebar, adding features, that you’d otherwise not be able to have.
From Lorelle on WordPress:
This looks like the start of a WordPress.com API system allowing bloggers to do various things by making some Widgets for WordPress.com, though the abilities of the API are currently unknown, it should be interesting, allowing users to have more ability to cusomize their WordPress.com blog.
For more information check out the WordPress.com blog.