Creating widgets for webpages

Hi,
I have been asked to create a "widget" for my client and am looking for the most appropriate way to go about and create it.

The widget is much along the lines of these on these found this page http://www.macmillandictionary.com/tools/searchbox.html 
So something small application that can be cut and pasted into other site

This widget is fairly simple:
•      The gadget will be populated by my clients XML data and point back to the main site

•      To have a simple method for other website owners to embed the widget into their sites.

•      Ensure that Google analytics tracking would work for external sites using the widget

As I primarily develop in ASP.net, I thought about using Visual web developer to create small webpage that could be embedded into sites using Iframes. However if the small widget pages are hosted on my server I would think this may cause an issue with analytics.

Also doing further investigation it appears most widgets are created using javascript (such as the example above)
So what is the best way to go about it? are there any good examples of creating this and what tools would be best to use?
Your expert advice would be most welcome.