Thanks for the tips. Unfortunately nothing worked
I tried reinstalling Java and moving the gadgets around but they still look exactly the same as they do in the image I posted. Also renaming the settings.ini file didn't have any effect either.
If it's a problem with XML what should I reinstall to see if that was the problem? Also, could it be a problem with the registry. Could there be some value missing from it that are required for the Sidebar to function correctly?