How can you make Windows 7 sidebar work like Vista's

In short, No. At least not by default.

You have three options:

The Hacky Way

Make a folder in /Program Files called VistaSidebar. The full path should be C:\Program Files\VistaSidebar. Copy the Sidebar from a Vista machine into the new folder on the Windows 7 machine. Sidebar, on Vista, is stored in C:\Program Files\Windows Sidebar. Close down Sidebar, and open sidebar.exe from the VistaSidebar folder.

You should get the old Vista sidebar. You can then just go into the Sidebar preferences and set 'Start Sidebar when Windows starts'.

I have not actually tested this myself, but it should work. Some gadgets may not work.

Using 3rd Party Apps

DesktopCoral

Download and install DesktopCoral and configure it to make a completely transparent bar at the side of your screen, then just move your gadgets over under the 'sidebar'.

Google Desktop

Download and install Google Desktop and use the Google Desktop Sidebar.

This solution might work for you as well:

http://nes.bplaced.net/sidebar7.html