Wow, I abandoned the hell out of this thread.
I have some thoughts, but no time. To be brief:
I'm a gamer. My favorite games have always been resource management games like Warcraft (not WOW, but the old-school wargames) and Sim City. (See thread on Sim City Societies, which I pre-ordered yesterday.) I feel you can learn a lot from these kinds of games, because they take abstract concepts and help you apply them in somewhat real-world settings.
However. I'm also an academic, and I think that the traditional Q-and-A, Lecture/Listen approach has value as well. At some point you have to learn the concepts behind the model, and I think without this academic foundation even the best-designed game is just that -- a game.
Plus, I think the edutainment model of pedagogy is somewhat limited. This works well for, say, Econ or the social sciences (Civilization 4, anyone?), but to try to apply it to history or mathematics or literature or natural science seems like it would end up being a high-graphics version of Wikipedia. Except, you know, less useful.
But I have seen how well my son has been learning from the Reader Rabbit series of games on our PC, and the production value on these games is pretty low. I think that the great untapped potential of edutainment for young children through high-school age kids is quite possibly one of our educational system's greatest tragedies. I think its usefulness is in addition to traditional education -- under parental supervision, as a supplement to homework time or a replacement for in-class drill-and-practice busywork -- and when used in this way it can help the student learn and retain a complex concept in a deeper, more useful, longer-lasting way.
And that's all the time I have...sorry.