The text widget inserts text in the normal paragraph styling to your site. It erases all HTML and CSS trash (tags, styles, etc.), but leaves exactly what you expect and need: bold, italic, underline, links, lists, paragraphs, line breaks. All styles are automatically transformed to already defined website styles.
It is a cut down version of the rich-text editor.
The text widget can also be used to create blank space between other widgets by inserting it, but leaving it empty of content.