Simon,
This looks really great! I'm excited to see so much progress, and I'm excited to see that Moodle will be the first of the major LMS systems out there to implement badges (at least that I have seen). I wanted to make sure that you all knew about some work that Moodlerooms is starting on redoing Outcomes. It seems like there will be some key points of integration between the two. For example, we may want to award badges once a user has achieved certain outcomes, etc.
If you are interested, here is the specification: http://docs.moodle.org/dev/Outcomes_Specification
Specifically, I'm guessing we are going to want to look at how badges and Outcomes interact on the User's Profile. I did some mockups previously about how this might work, where I just put placeholders for Badges (since I knew that you were already working on it). Take a look and let me know what you think: http://docs.moodle.org/dev/Outcomes_Student_Specification#Profile_Page_-_Overview
Looks great! Keep up the good work!
Phill