Try going to control panel in category view (in the top right you can set the view). Click on appearance and personalization once under the category select: "restore desktop gadgets installed with Windows". This seems like the easiest option for fixing this.
This fix seems to have worked, all credit to Shawn on the Windows 7 forums.
1. Open a elevated command prompt (right click - Run as administrator)
2. In the elevated command prompt, copy and paste each command below and press Enter one at a time. After each time your press Enter, you will need to click on OK before doing the next command.
taskkill /im sidebar.exe /f
Regsvr32 "%ProgramFiles%\Windows Sidebar\sbdrop.dll"
Regsvr32 "%ProgramFiles%\Windows Sidebar\wlsrvc.dll"
reg delete "HKEY_CURRENT_USER\Software\Microsoft\Windows\CurrentVersion\Internet Settings\Zones" /f
NOTE: This command will reset the security zones in Internet Explorer back to the default settings.
"C:\Program Files\Windows Sidebar\sidebar.exe"
NOTE: If your Windows 7 is not displayed as the C: drive in Computer, then substitute C: in the command above with your drive letter instead.
3. Restart the computer to apply.
4. Check to see if the gadgets on your desktop are displaying correctly now. If not, then try uninstalling and reinstalling the still bad gadget, or do a System Restore using a restore point dated before the problem.