From the Google Blog

1st – diGGGadget – Stay on top of the latest stories from digg.com.
2nd – Multiplayer Reversi Game
3rd – Day/Night World Clock – Not only does this clock show you the local time, but there's also a map that indicates whether it's night or day at any given hour.

Links:
http://googleblog.blogspot.com/2006/09/and-desktop-gadget-winners-are.html
http://google-code-updates.blogspot.com/2006/09/desktop-gadgets-galore.html

Added honorable mentions:
http://googledesktop.blogspot.com/2006/09/results-of-google-desktop-gadget.html