To work with a standard atlas or map is definetly important. But geography is not only reading and interpreting maps, but also understanding the world as a globe. There is no better way to understand global relations than having "hands on" the globe - and that is what Google Earth is built for.
So in my oppinion students need both - an atlas or a map AND Google Earht.

I think that GE is an etremely valuable tool to use in school.
I use it for science lessons, you can clearly see, for instance, Mid-ocean ridges and many other interesting phenomena.

I also used it as a means to give value to the work the students made using sketchup: I let the kids drive the cars they've drawn, inside GE.
(Gooogle Earth Blog made a post about this sometime ago).

http://www.guzman.it/guida/?model=Paolo3D2009

guzman

I forgot to say that the work with sketchup was part of a work in math about solids and polyhedrons.

Here are some examples of what they've drawn:

http://www.youtube.com/watch?v=Ni6TDPpKqw4

http://sketchup.google.com/3dwarehouse/search?q=guzman+studenti&styp=m&btnG=Search&reps=3

I'm an instructional tech specialist at a middle school in Newton, and am really happy about how much our social studies teachers have embraced and
started to "own" Google Earth. One of the teachers did experiment with a GE-based test, and it went quite well. Students were asked to identify specific placemarks and also respond to more evaluative questions using placemarks.

GE is obviously of enormous use in educational settings and I've advocated its use on my blog for a long while. I would sound a note of caution re exams though, moving in 3D space is necessarily complex so you could have students struggling with the controls which is nothing to do with testing geographical knowledge. Also, without customising the imagery cache multiple copies of GE operating at the same time are capable of overloading school networks. Capturing screen shots or using film clips taken of GE would be a good solution to this issue.

In China,there are many teachers using it on classes.I do not think it is surprised.

Google Earth is just amazing! Talk about cataloging at a global level!

I teach social studies at the elementary school level and wanted to use Google Earth in the classroom, but the level of the information was too complex for the students. Then I found a product called Stratalogica from Nystrom, which has historically made classroom maps. It is absolutely amazing! It blends the grade-level information with Google Earth so you get everything! www.stratalogica.com

My google earth 5 running on windows XT fails to access google's server kh.google.com:80 yet I can access the ip address 74.125.127.136. If anyone has any idea why this is occurring or how I can fix the problem, it would be greatly appreciated.

Great idea - as it so happens I am also planning on using this both in my geography lessons and in exams where students will be required to plot key historical events.