It happened to me exactly the same. But as we have other 3 PC's at home, running Windows 7 and IE8 and none of them showed the same problem, I dedicated a couple of days to find a solution on my desktop. After several trials, experimenting all the sugestions found in Internet, I remembered I had installed the last driver
and its Catalyst program for my ATI Radeon graphic card, downloaded from the AMD site. Today, I uninstalled completely all the stuff, using the Driver Sweeper found at Guru 3D, and forced Windows 7 to reinstall its original driver and...the problem is gone. The gadget clock works perfectly, the second hand does not freeze and the 'sidebar.exe' file does not take 25% of my processor anymore. Even after its update, proposed by the Windows Update, everything works as it should. It is important to say that none of the other PC's, which had never developed those problems, have the Catalyst and the ATI driver installed.