According to the NY Times in this article:

A person briefed on Apple’s plans said that at its software developer conference this month, Apple intends to announce that it will make it possible for developers of small programs written for the Macintosh to easily convert them to run on the iPhone.

They don’t say widgets directly, but it sounds like it to me. Jobs stated that they were trying to work through a way to allow 3rd party development without risking phone stability. Widgets are the perfect answer to that at this point, so I’m inclined to believe this quote.