PRIMER  I just discovered that you don't need this broken widget. FOGCITYNATIVE made me realize that I could just use Safari Web Clips. You don't even need the URL he provided in his HINT/TIP. It's even better if you don't, because you'll have to recreate the widget again once Pandora changes the version from

https://www.pandora.com:443/radio/tuner_8_8_0_1_pandora_mini.swf to

https://www.pandora.com:443/radio/tuner_8_8_0_2_pandora_mini.swf for example.

The easiest way to do this is to open your Pandora account in Safari, log in, and let it start playing. Go to the taskbar at the top of your screen, while Safari is active. You will see 'Safari' next to the Apple symbol. Click File>Open in Dashboard... It will give you the option to select an area. I personally selected the entire field that has options (Row 1 with radio stations and active song, Row 2 with 'about this music' etc), because this allows me to have full Pandora functionality from within Dashboard, as opposed to Pandora Widget 1.0.6. Now click 'add' (purple button in Safari 4, blue button in Safari 3.2.1). Dashboard opens with the new widget active. Click the little 'i' symbol in the lower right corner of your new Pandora widget, and uncheck 'Only play audio in Dashboard'. This will keep Pandora playing in the background, even when Dashboard is not active.

If you find that Safari Web Clips is not working for you, no matter what you do, you probably deleted the Web Clips Widget on your computer. This Apple Widget is required to create web clips. Once I reinstalled this widget (I had an Apple Product Specialist e-mail me the widget), I was able to make my own Pandora widget. Using this method is preferable over having to mess with this Pandora Widget, no matter what the version. Ronald Belliott created a great widget, but his support is non-existent, and his website is hacked. No need to wait for Ronald, now you can do it yourself, and better.  
(Version 1.0.6)

FOGCITYNATIVE  Ooops! One more thing . . . after you make your widget, click on the "i" button in the bottom right and UNCHECK the button for "Play Audio Only In Dashboard" and now it plays with Dashboard in the background. Yipee!  
(Version 1.0.6)

FOGCITYNATIVE  I tried the suggestion of editing the included html file but the widget still wouldn't allow me to control it. Clicking anywhere in the widget did nothing.

Here's an EASY solution:

Open this link in Safari 4 beta:

https://www.pandora.com:443/radio/tuner_8_8_0_1_pandora_mini.swf

Go to the menu and select View In Dashboard.

That's it; you don't need this developer's application and his lack of support. You just made you very own widget. Nice and easy.  
(Version 1.0.6)

EMP1  for everyone that is trying to get the "file not found" error fixed you can fix it yourself.

browse to pandora.wdgt file and right click and select show package contents. Then open Pandora.html in a text editor, and change "tuner_8_8_0_0_pandora_mini.swf" to "tuner_8_8_0_1_pandora_mini.swf".

save and install the widget and your done.

hopefully the author will offer a more robust solution so we will not have to keep modifying/upgrading the widget everytime pandora changes the filename/version. Even if not, it is still a great widget and only a minor annoyance that you can fix yourself.  
(Version 1.0.6)

MD_KEARNS  Not only is the widget dead again, it appears that the developer's site has been HACKED!  
(Version 1.0.6)

PRIMER  Well, April 8 2009, and the widget stopped working again - the infamous 'File Not Found' error is back in full glory, without explanation. If there is a way to fix this on the user's end, the author could perhaps post this somewhere. As of now, Pandora Widget 1.0.6 is as useless as 1.0.5 was for me, given this error. This would be a great widget if it actually would keep working. Very disappointing.  
(Version 1.0.6)

SCOUT SNIFF  Pandora Widget runs out of buffer when I close my dashboard; after a few seconds the music stops. Is there a way to permit the Pandora widget to continue to run uninterrupted while the dashboard is closed?  
(Version 1.0.6)

PRIMER  The 1.0.6 release of the Pandora Widget does seem to fix the 'File Not Found' error present in 1.0.5 and earlier releases. Props to the developer for crushing that bug in a timely manner. This is my favorite widget, although I wish that the drop-down menus like 'about the music' and 'share' would actually be functional. These are negligible issues however, since the 1.0.6 widget does what it ought to do: streaming my favorite music through Pandora, without the need to open a browser window. Good work.  
(Version 1.0.6)

PRIMER  Excellent widget, although 1.0.5 does NOT fix the 'File Not Found' error as claimed by dev. This error popped up for me on March 4, while I never had an issue before (I've been using this widget for months). No amount of firewall tweaking, reinstalling, cache flushing would fix this. Also, CPU load will keep climbing sometimes due to this widget, as I have noticed on my Macbook. Not sure why this occurs.  
(Version 1.0.5)

DPOCIUS  I'm seeing the unresponsive UI others are seeing. Additionally, I'd like to see an "i" control where at least the developer info is hidden. I'd forgotten where I got the widget and I embarrassed myself e-mailing Pandora support to ask about the poor response to mouse clicks. Boy, was my face red when the guy on the other end told me Pandora didn't have a widget! He thought it was a good idea, though.

I have found that right-(control) clicking on the widget before a button seems to get its attention. Also, double-clicking seems to make it snap to.  
(Version 1.0.5)