I was watching Joi Ito’s Wow presentation at 23C3 (excellent, btw), and he made an interesting reference to a paper by John Seely Brown. I tracked down the reference to a working paper by Brown and Douglas Thomas called The Play of Imagination: Extending the Literary Mind. (the most up to date version of the paper I could find is here).
I’m only partway through it, but it looks outstanding. It starts with a discussion of the history of MMOs (their background in the world of MUDs, etc.), but is really about how the evolution of these games has brought an environment that provides for a fundamentally different learning experience than today’s (and yesterday’s) standard classroom. Definitely worth reading.