David's demo reminded me of the early days of BeOS. Trying to explain the potential of an operating system, especially one with such a completely new and unlimited architecture is quite a task. David wrote the thing so there is also something mystical about getting a demo of a new OS by the person who wrote it.
Croquet is an amazing concept, but it is an old concept. It is based on Smalltalk/Squeak and is a totally object oriented collaborative environment. David is a 3D guru so he has made the interface completely 3D where you can fly around, see other users as avatars, create 3D objects with scripts and share them dynamically and in real time in the shared space. He is working on all of the necessary pieces to deal with identity and security as well. It is totally cross-platform and is "pure" in its portability. The architecture is incredibly clean and you can tell it is being designed top-down by someone who's done this before.
The main problem with new operating systems is that you need a killer ap to get it into the main stream. David calls Croquet a broadband phone call. There are obviously A LOT of educational applications.
When I saw the system, I thought of a few things. It would be a very cool environment for blogging. (When you are a blogger, everything looks like a blog or blog tool.) It would be really neat if you got an IM when your fellow bloggers were online and you could switch into the broadband/rich interactive mode and browse and point at micro content together. Last night I came up with what I think might be what I'm trying to say. I think we are mastering the art of micro content journalism. What Croquet made me imagine was some sort of object oriented journalism with smarter micro content which had behaviors and attributes. The Creative Commons license being one attribute that could be included in such an object attribute.
The other thought that I had was that the ability to change the attributes of the objects and environment (color, shape, etc) would be a great way to help people track privacy and identity issues. It would make the concept of access control and permissions much more intuitive for the average user and would help make clear the delineation between different computer spaces and who you are and what information you were bringing with you as you moved from server to server.