This is a potentially wonderful service.
I'm not sure whether all of you (or any of you) know about Second Life. This is a virtual world with graphics and interaction to rival many games. It is not a game but rather a virtual space that enables people to interact with avatars (computer representations of you) and objects.
This type of immersive environment has real potential for language learning and, not surprisingly, there are a few areas in Second Life dedicated to language learning (primarily ESL). However, these spaces lack a certain polish that I think will be necessary for wide spread usage.
Language Lab and others like it might be the future in this realm. I say "might" because they have not officially launched yet and thus I cannot check them out. I have a request in to them to check the place out, let's see if they get back to me.
Dan
P.S., if anyone is interested in getting into Second Life, let me know. I can walk you through some of the steps and I can provide some resources and advice.