Yahoo Widgets does offer a separate layer option, it's called "Heads Up Display". Right click on your widgets and select "Hide Widget". Each one you do this to will be hidden in the Heads Up Display.
I too prefer most of my widgets/gadgets to be hidden so that's why Y! Widgets is the program for me.
Here's a pic of my desktop normal and then in heads up display. All you do is hit F8 (Key can be customized) to access it.
Click to view attachmentI also made a simple VBS script which runs "F8" and I put that in the quick launch icon area. So
if I click on my customized quick launch "dashboard" icon I also get the heads up display.