I'm sorry if I'm not familiar with all the details of how the widgets spec is going but the specs encourage comment so I'm commenting :-)
It seems like widgets have 2 uses #1) As a way to package an HTML5 app that can be downloaded similar to a native executable #2) As a way to package an HTML5 app that can be embedded in a page but easily distributed as a single file (ie, do what Flash / Silverlight / Unity3D currently do except based in HTML5 / EMCAScript) Use #2 would benefit tremendously if like Flash / Sliverlight / Unity3D the application could start as soon as it has enough info to start as supposed to having to wait for the entire package to download. To accomplish that goal requires using a format that can be streamed. Zip is not such a format. Zip files store their table of contents at the end of the file. They can have multiple table of contents but only the last one found is valid. That means the entire file has to be downloaded before a UA can correctly figure out what's in the file. Has there been any consideration of switching the spec to a stream-able format like gzipped tar files? It seems like a shame to miss this use case.