For my son's birthday I bought him a 6-month subscription to the EverQuest online adventure game. If you haven't played it, then I suggest that you obtain a copy and try it -it is VERY kool and quite cheap ($10 per copy + $10/month online fees, with the first month free).
It is so cool that I think it could be the "killer" app for Squeak if a limited client/server Squeak implementation could be devised and made part of the default image or at least available as a standard module.
EverQuest is a first-person-shooter graphical MUD with upwards of 1,000 players online simultaneously. The interactions are overwhelmingly complex and quite fun.
In addition to the "wow" factor of letting every kid host his/her own baby graphical MUD, a Squeak-based implementation would allow all sorts of collaboration between researchers, teachers, students, etc. Sorta a graphical realtime Swiki.
Just a thought.