Help with custom widget options! (saving checkbox option)

I would do:

function update($new_instance, $old_instance) {
    ...

    $instance['show_photostream'] = $new_instance['show_photostream'];

    return $instance;
}

function form($instance) {
    $defaults = array (
        ...
        'show_photostream' => !empty( $instance['show_photostream'] ) ? $instance['show_photostream'] : false
    );
    $instance = wp_parse_args( (array) $instance, $defaults);