I think I have solved this.
Yes, it's a clean install of Windows 7 64 bit. But I have the Sidebar from Vista loaded because I want a clean space to show my gadgets (without them intefering with or being lost by other apps). When that is loaded, trying to install new gadgets causes the error above. So, I close off Sidebar, make sure it has exited properly (and isn't still around in the notification area), then load one gadget into the desktop somewhere. This ensures the Windows 7 version of sidebar is loaded. Then I can install gadgets. Then, I close off all gadgets, start up the Vista sidebar and add the gadgets which are installed.
Does that make sense? it seems to work for me.
Alan