The Google Gadgets are a cute idea, they allow to encapsulate Web forms into pieces of XML, which then can be added to personal Google start pages and similar services.
A bit like the old favlet/bookmarklet concept based on javascript-URLs, but with more features like user preferences. I'm not yet sure where they store user preferences, on their servers or in cookies.
The name add.gif for the link icon isn't very intuitive, I renamed my copies to googlet.gif. My second experiment after the xyzzy "custom search engine" is a LEO dict search form, but so far Google claims that it's unavailable or empty when I try to add it.