When I open Windows Sidebar, the clock gadget is displayed as a black square. All other gadgets show up as white rectangles with one of those information (i) icons and a plus sign. The settings button next to the gadget does not work, but the x to close does. Here is a screenshot:

This behavior is observed if the XML registration is missing in the system. To fix the problem, use the following steps:
regsvr32 msxml3.dll
Similarly, run these commands:
regsvr32 scrrun.dll
regsvr32 jscript.dll
If the registration was successful, you'll see the message DllRegisterServer in <filename> succeeded for each command executed. Open Windows Sidebar (sidebar.exe) and check if the problem is resolved.
Last updated on Aug 11, 2007