Sorry to come late to this discussion.
The lack of a built-in WYSIWYG equation editor hurts the student much more than the teacher. Teachers can write in LaTeX -- it's in their job description. Students should write math directly in the language of mathematics. That means they need a WYSIWYG editor. The lack of an integrated WYSIWYG equation editor in Moodle hurts students most.
The best workaround for students that I have found is TeXaide
, the free version of MathType. It has the same (or similar) WYSIWYG interface as MathType. After the student has created the math expression, ctrl-C copies LaTeX to the clipboard, from which it can be pasted into any text area in Moodle (e.g., Essay question, online assignment).
When we require students to download
and install a program like TeXaide in order to do their homework, we can expect problems. The ideal no-excuses workaround would be a Web-based WYSIWYG equation editor that (like TeXaide) outputs LaTeX to the clipboard. sMArTH
promises to deliver this functionality and "almost works in Firefox