Unlock the desktop and you'll be able to add and remove Plasma widgets from panel or desktop. You add Plasma widgets by simply dragging them where you want them. click on an widget to remove it.
The button allows you to add widgets you've previously downloaded and download new Plasma widgets. Currently it supports native Plasmagik packages and some Mac® OS X dashboard widgets. Widgets you install this way can then be accessed just like regular, preinstalled widgets.