I'll take this opportunity to plug my site that is built using the Twitter API - http://www.playtwabble.com . Twabble is a vocabulary game based on the words you use in your Twitter status updates. It uses a point system based on the game Scrabble. I built it to learn Django and Python. I didn't get much feedback when I submitted it to HN, so here goes again?
Hope this isn't spammy, I think my game illustrates a basic example of what is possible with Twitter.