Here are components that allow creating gadgets for SideShow with our favorite c#.
Microsoft called it Windows SideShow .NET Framework Components 1.0 (link) and... unfortunately ... must be deployed to the client. But still this is very cool
Here short description from MS:
The Windows SideShow .NET Framework Components installs the runtime and development components that are required to build and run gadgets for Windows SideShow using the .NET Framework version 2.0. This download facilitates gadget development and enables developers to build compelling applications to support Windows SideShow-compatible devices. Users are required to install this component in order to run gadgets that have been built using the component.
Developer documentation can be found in the Windows SDK.
UPDATE: I just found that this is creating of great Jeffrey Richter
Here you can find how to use these APIs (http://msdn.microsoft.com/msdnmag/issues/07/01/SideShow/default.aspx)