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I am a Moodle-user.
First of all, as far as I know Moodle is used in considerably more than 200 institutions.
A quick Moodle plug.
Currently there are 958 sites from 72 countries who have registered. It is near the top of
freshmeat rankings(just behind things like Apache) and towards the top of the
google ranks alonside the two major commercial systems, Caroline and Atutor are rather further down. The MIT project has yet to come into fruition. It is translated into about 40 languages, and has an active (posted in the last month) user group of
1353. These users are teachers, and generally teachers are forcing a lot of their students to use Moodle too! We teachers have a captive member base!
But like you say, it is a system/plaform too, and a lot of the functionality doubles up with Xoops.
Here are some of the weakness of Moodle.
1) Moodle does not have a way of reorganising those courses into functional groups for each user (no "my-moodle")
2) Moodle does not have a file management system like that of MyDMS, Typo3 or various other CMS which can manage files. I hear that AWF and Xayara can do this sort of thing. How about Xoops?
3) There is no Wiki type module in Moodle.
4) Moodle is not all that good at making an attractive multi function, easily maintainable website. It makes a lot of courses, with modules that plug into the course homepages. There is a plugin to allow moodle and the postnuke member database to speak to each other. Perhaps that sort of link could be made with Xoops.
I would really like to see more portal type CMS (Xoops type CMS) functionality in Moodle.