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:

Hideously named “WordPress Widgets” is the method of accessorizing your WordPress.com sidebar on WordPress Themes which permit such interaction. Through the use of Javascripts and Ajax, you can simply click and move boxes representing content elements within your Theme’s sidebar. The elements include Pages, categories, links, most recent posts, most recent comments, meta/admin, and text.

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.