Part of what I'm trying to do (see the LeftoverPi Play area) is to create some of the pieces of a mathematically immersive environment to counter the fears that people have that children will not learn the "hard stuff" if we don't make them.
Ask yourself this: How do children learn language? We think of learning a foreign language as "hard", yet children learn one without a single drill or homework assignment forced on them. How do we account for that?
I think that the answer is something like this: they learn it naturally by immersion in a linguistically rich environment, with mentors who continually show what language can do and evidence everywhere of what is useful and desirable and empowering about learning it.
We can do that for math. We can create an environment with all those characteristics that make learning language a natural activity. And I'm not just talking about computer games, which might be the first thing that comes to mind--physical toys, videos, art, music, etc, would all play a part in making mathematics a natural part of life that children would consider a desirable thing.
A couple of days ago I was looking at the Kusasa project (which I was directed to via a talk at OSCON) and it mentioned Seymour Paypert's "MathLand" concept. It's wonderful to find that you're not alone in your radical ideas :). And searching for that led me to the blog post "Hard Fun in Math Land" by Colleen King about creating a scripting language to help kids explore 3D geometry in Second Life--again, kindred spirits on the same wavelength, as I also saw Second Life in an OSCON keynote and thought it would be a great place to have a mathematical playground.
I'm excited about the confluence of all these lines of thought, and I can't wait to get in contact with some of these folks and see what we can do about working together.
Although the work I'm doing right now is aimed at making prepackaged games that embody mathematical concepts (but without displaying numbers or mathematical symbols directly--much like what Paypert was talking about), it would not take much to add the ability for kids to create their own puzzles with it. And from what I've seen (only demos so far), Second Life would be a great place to put this kind of thing on display.
Well, all for now, hopefully I'll be able to post a more complete vision of a mathematically immersive environment soon.