Contextual gadgets are applications that are displayed at the bottom of individual email messages and are triggered by contextual clues, such as the contents of Subject lines, sender and recipient email addresses, and more. For example, Gmail already provides a YouTube contextual gadget. If the body of an email contains a link to a YouTube video, a clickable thumbnail view of the video appears at the bottom of the email.
Contextual gadgets support the gadgets.* API as well as an additional API that allows them to extract contextual clues. Contextual gadgets in Gmail provide a way to integrate functionality into the workflow at precisely the point where it is useful.
Sidebar gadgets are small, portable web applications that live in the left-hand side of the Gmail UI. Supporting the gadgets.* API, these are an excellent choice whenever implementing complex functionality.
Many of the Gmail Labs features are implemented as sidebar gadgets, including the Google Calendar gadget. Additionally, existing gadgets from other sites can often be converted into sidebar gadgets with little or no modification.