I have done it with teachers to show them how they can use all the different things in Moodle and then play around themselves in a safe environment and this went really well.
With students I used it for Year 8 students to teach them HTML by using the editor in code view which was good. It was also good as very easy to do it the other way around and put together some work and then view source code. We also used HTML in hot potatoes and quizzes to add pictures and sound files which again demonstrated how a little knowledge of HTML can be powerful.
It was a little bit of hassle to start with setting up the courses individually. However I can prabably do a class of 30 in about 30 minutes now. As all it is, is replicate then assign role in the course as a teacher.