Here are three scenarios:
1. A contact widget with the photo of the contact and his status. - you could just rotate that 90 degrees, no problem here.
2. A widget that spans the whole width in landscape like mauku - shrink it to fit the size in portrait mode, it's still useful because you could see if there is a new message, but if you want to read it you'll have to do that in landscape
3. Long widgets that don't have text in them - like OMWeather it could reorient itself automatically with five icons in a row or in a colon.

You could give rotation posibility to the widgets and leave it to the developers how they'd look like in portrait and landscape modes. They could transform in something different. Like for example the twitter widget could display the whole tweet in landscape mode or just the number of new tweets in portrait mode.

I also like the idea to be able to place the widgets in different positions in landscape/portrait modes. No need for a new wallpaper imho.

In the Dashboard the apps that have portrait mode could reorient themselves automatically.