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[sitename.com...]
Or
[sitename.com...]
BTW, I'd eliminate the .html just incase you want to switch to a new file format in the future:
[sitename.com...]
Having directories or folders dosent make a difference in fact may add keywords to the url. But if you are going to have links from home then to category and then to widgets.html you will lose PR on the widgets.html page.
I see, so what would happen if I link from Home > widgets.html AND Home > Category > widgets.html? Will I get extra PR passed on since widgets.html is being interlinked from 2 sources?
I see, so what would happen if I link from Home > widgets.html AND Home > Category > widgets.html? Will I get extra PR passed on since widgets.html is being interlinked from 2 sources?
No it would not. There is no correlation at all between directory level and PR.
It's all about linkage. In this case having the directory level would likely make sense for other reasons including user friendlieness, so that would be a reason to do it.
None of this has the slightest to do with PR.