I recently re-ran across the Khan Academy and was delighted to see some ideas that had been forming in my mind around how education could be gamified actually in production. I had recently watched the TED talk, How Games Make Kids Smarter, which led me to read this book on gamification.  I combined some of those ideas with the leaderboard/points/achievements enabled across the Xbox ecosystem along with some concepts I had recently seen while playing Skyrim (visual "tech tree" overlayed as constellations in the night sky) and came up with a series of ideas on how they could be applied to education.

I was amazed to see almost all of them applied to the Khan Academy's approach to education. They have an great gamification system (energy points, badges, and "Tech trees") as well as some incredible data visualizations that help the student or "coaches" visualize progress and quickly identify areas where help is needed. Check it out!

Just goes to show that when an idea's time has come, it will manifest (check out What Technology Wants for some background on this concept).

I've been building a collection of similar educational sites:

http://questatlantis.org/
http://www.freerice.com/#/english-vocabulary/1496
http://codeacademy.com
http://www.lynda.com (This one isn't gamified)

Also, here's an interesting article from IDEO on gamification: http://patterns.ideo.com/issue/gamifying_the_world/

For reference, here's the tech tree from Khan Academy. You navigate around it with space as a backdrop. Notice the similarities with the Skyrim "tech tree". Now imagine something like this with educational trees for every area of knowledge that shows how one can progress from no knowledge to mastery.