However, the 'standard' application - if I may dare say that for a database activity would be where you want your learners to collect information collectively (as a team). Everyone contributes and they can all look at their combined effort. It could be something as simple as a reading report. The type of information that you want to collect should have distinct fields that you can give a name and allocate a data type.
Be ready for a small learning curve to create the table with fields and also to set up the various templates that you need for accessing/displaying the data.
I used the database activity recently for a mathematical literacy task where learners had to each research a country and get information on different aspects of the country such as area, population, GDP etc. They then had to make entries in the database and upload the flag of the country into an image field. Learners could comment on each others' entries. They did get carried away a bit getting off topic and so on , so I then disabled their ability to add comments (overriding permission of student role) - but allowed it in the main (in the activity settings) so that I could still comment on their entries.
Later they had to export the combined results of all the learners to an Excel spreadsheet where they could calculate the mean, median, range etc. of different fields and draw graphs of the different aspects of the countries they had researched. In order for them to be able to export to Excel, I had to override permissions for the student role. They uploaded their spreadsheets in an upload assignment.
The learners enjoyed the activity and found it beneficial. I graded the entries and the uploaded assignments. Perhaps there are other database module users who can share their experiences and say what they have used it for?
Very nice idea for databases as a student built resource for an activity. Frank is correct... we have some good ideas in the Moodle Exchange. Several of the ideas for glossaries could also be pulled into a database and have some extra fields added that would be very useful.
If you want to see some of the databases, glossaries or quizzes set up, we set up many of them in the demo.moodle.org site in a course called the Exchange Samples.