Whoa, cool. I just verified that this unused Dashboard-ish "Widget" Icon is indeed inside the iPhone, using iFuntastic's file browser. That's actually the image. Look for yourself by searching this path:/System/Library/CoresServices/SpringBoard.app/widget.png. Cool, huh? Evidence of widgets on the Apple phone. [iPhoneology]
Other evidence of widgets on the iPhone? Stocks. Weather. Calculator. Notes.
I think these should all be on a subdirectory, that you could get to by tapping that button, thus freeing up space on the main page for some more full-featured apps. Like an mp3-to ringtone utility.