I encountered an issue at work when we wanted to add some gadgets to the Vista Sidebar. Upon opening the Add Gadget panel, all of the available gadgets briefly appeared and then faded out, leaving a blank window.
This can be resolved by resetting the user’s Settings.ini file for the Sidebar. This is located at %USERPROFILE%\AppData\Local\Microsoft\Windows Sidebar. Just rename Settings.ini to something else after you close Sidebar (must be closed from system tray too), and then re-launch Sidebar. A new Settings.ini will be created. All of the user’s Sidebar settings will be reset, but at least they are now able to add gadgets.