The widget manifest available in Windows Mobile 6.5 is an XML file that describes the corresponding widget in detail so that Windows Mobile can actually do something with it. This’s the first file looked at when the widget’s being installed or executed so, even though it’s simple, it’s extremely important. Windows Mobile 6.5 implemented widgets based on W3C Widgets 1.0: Packaging and Configuration standard dated Dec-22-08. In summary, the widget manifest has to be called config.xml and its presence’s required in order for the widget to be considered valid.
More info: Windows Blog