I came across EarthQuiz done by some colleagues running the Geode.net project.
Its a really nice idea, find some streetview (or other geotagged photo or satellite image from Google maps) and ask a geology question related to it. For extra fun, you then have to guess where in the world the photo is from (bottom left map in the image above).
Good use of VR in teaching: The nice teaching point is the geological question, you have to mostly navigate around in streetview to hunt for clues to solve the geological problem. This is a good use of VR, if you accept my argument that this is a simple form of Virtual Reality. The 360 degree vision is actually important to solving the problem whereas in a lot of cases, the VR is only there for show.
Where I'd take it: What would be really nice would be if it developed into a resource where you had a number of streetview points that you navigated to via a Geological map. You'd then have to solve a more complex geological problem. However, I think that would involve taking custom streetview images in order to generate the required material so not a small project.
A more detailed write up.