From The Daedalus Project:

When I was attending Haverford College, a Quaker School (middle school) in the neighborhood used what is called a “Story Path Curriculum”. The curriculum of a typical semester is embedded in an ongoing story-line set in a historically interesting period. For example, the students in the class are each assigned a character-role in a hypothetical late 19th-century iron-forging village in England. From baker to tax collector, from blacksmith to local pastor, they have a good variety of roles covered. For English class, they may be asked to write a creative piece of “a day in the life of …”. For History class, they may be asked to research the common social or seasonal problems an iron-forging village faced. For Math class, they may be asked to determine the optimal proportion of crops to plant or to calculate the most profitable trade routes. For Art class, they may be asked to create a small-scale model of the village. For Social Studies, the students may have to decide how to deal with a local epidemic of scarlet fever.

Thus, instead of having disparate subjects that students may not find relevant in their lives, the point of a Story Path Curriculum is to create a fun and interesting hook to draw the students in and then embedding the traditional subjects in a relevant and memorable way.

Additionally, some excellent thoughts and discussion on Kuro5hin regarding a proposal for a collaborative learning system.