Titus Brown has created a short video showing what the IPython Notebook can do. The short answer is, a lot: it's an interactive notes-plus-graphics-plus-live-coding tool that runs in the browser. (The video doesn't really get going 'til the 2:50 mark, so you may want to skip ahead to then.) The question isn't whether we want to using this in Software Carpentry, but when. Installing it is (in my experience) still painful, but it holds tremendous potential. If we can get to the point where 90% of our intended audience can "just run it", and the other 10% need only a couple of minutes' help, we'll begin the switch.
Now, if only we could figure out how to integrate the shell, version control, databases, spreadsheets, and everything else into this... :-)
See also this longer screencast from Fernando Perez (its principal author):
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