consumer.html

<div id="widget"></div>
<script src="http://yourapp.com/widget.js?element=widget"></script>

widget.js

/*

  the code outside the function(container) works nice
  
  what do I do wrong inside?

*/

var newDiv = document.createElement('DIV');

newDiv.innerHTML = "<p>a paragraph outside</p>";

document.getElementById('widget').appendChild(newDiv);


(function(container){
 
 var newDiv = document.createElement('DIV');

 newDiv.innerHTML = "<p> a paragraph inside</p>";
 $(this).appendChild(newDiv);
 
 
 /* var list = new Element('ul');
  list.insert(new Element('li').update('foo'));
 
  alert('inside does not work');
 
  container.update(list);*/
 
})($('widget'));