I didn't say I agreed or disagreed with the Register article.
So I'll put my views point by point for our conversation. 
1) I don't think Konfabulator is "bloated" in general but that it's overall design lends itself to bloat. Unlike DesktopX, Konfabulator doesn't give you the option to IMPORT widgets into a single environment. As a result, each widget on Konfabulator has quite a bit of overhead. On DesktopX, I could load up the DX environment and import 20 widgets in and it woudl probably use less than half the memory it would on Konfabulator. However, as a practical matter, most people are only going to run 2 or 3 widgets at which point it's not an issue.
2) Want to know my opinon why the Register is so harsh about Konfabulator? Because they've followed the whole desktop extension scene since the start -- the real start back in 1999 and tend to throw water on those hyping their works. This panel they did was the height of arrogance IMO. It doesn't susprise me one bit that some media outlets, particularly the Register, would throw some water on that sor tof thing.
3) I cannot comment on Yahoo and DesktopX or other Stardock projects with Yahoo. But I will say this, if Yahoo makes its purchasing decisions based on how flashy the default content is, that's pretty silly. Moreover, I would put DesktopX 3.1's default content up against Konfabualtor's any day.
4) Are widgets useless? I obviously don't think so. But at the same time, I don't think there's such a thing as "Widget Mania". For all the coverage widgets have gotten, we still end up seeing a lot of web cams, clocks, and weathe rmonitors. If you ask me, and you did, I suspect that in the long-run Konfabulator's contribution to widget lore will be to have stereo-typed widgets as being graphical mini-applets for displaying net data. That's my official prediction. 5 years from now, if widgets are popular at all, it'll be mainly for displaying various XML feeds in a graphical format. But for that to happen, it'll have to compete against Microsoft's Avalon and I wouldn't want to take the bet that Konfabulator, even with Yahoo's help, is in any position to take on Avalon. Avalon is MUCH MUCH easier to code that kind of thing for than Konfabulator (or DesktopX).
In conclusion, Konfabulator got flamed by The Register IMO because they asked to be flamed. By putting up a 10 day pat on the back hype-fest they invited someone to poke at them. If they wanted unconditional fawning, they should have stayed on the Mac platform where the Mac drones are always more than happy to ignore reality.