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This new product was much better than the first so I basically took all the files from www.widget1.com and moved them to www.widget1.com/Widget1/. I went around the web updating links to point to www.widget1.com/Widget1/ instead of www.widget1.com.
I then pointed www.widget2.com to my one and only hosting account (they let me do it), and moved all of Widget2's files where Widget1's used to be. So if a user surfed to www.widget1.com/ or www.widget2.com/ they were taken to the same place and greeted with my new product.
I'm now worried that Googs will penalize me for duplicate content (I have PR6 on the old site with a few ok backlinks). I have read many posts on how to redirect (my host is Apache I believe), but I can't seem to find one for this situation.
I'm thinking of just dumping the old domain as I don't really make much money from that product, but I wouldn't mind finding a nicer way.