http://www.phoronix.com/scan.php?page=news_item&px=MTgyMjk
Ken Vermette explains DWD as «a core protocol where an application would broadcast a list of widget specifications, at which point other parts of the system (DWD Consoles) could take the specified widgets structure, generate the UI, and display native widgets where desired. Using this method, DWDs try to strike a balance between SSDs and CSDs, allowing application developers to be more flexible inside the window decoration while also addressing the need of a window manager to remain in control to avoid the downsides of CSDs.»
DWD would allow easily embedding widgets into window borders, widgets could be displayed outside of the main application window itself, and could allow for some other interesting use-cases. Among those other interesting scenarios would be remotely rendering widgets onto your phone from your desktop and allowing media player controls from an application to be easily embedded in the task manager window.