This was quite difficult for me since I'm not a gamer. It was a bit odd and awkward at first. One of the initial problems I had was simply creating my account. I tried several times and could not get past the security words. That made the beginning experience even more frustrating.
I think you'd have to practice quite a bit to move easily in SL. I felt as though I was clumsy navigating around. My avatar was had very little "smooth". I can see how kids would love this. With some practice, and demonstration, this could be a fun way to explore new skills, create a new product for a demonstration, or travel to other places like a virtual tourist.
I do think it would have to be carefully monitored. I am not particularly comfortable with it, would probably not use it with younger students, and would make very sure that parents were well-informed if I was planning to make it part of a lesson.
So, my feelings on this one are mixed. There are definately benefits, but I can also envision it as a huge time drain. I'll just have to play with it some more and see how I feel over time.