[Update: Gamasutra reports that the presenter was Ichiro Otobe, and that Tadashi Tsushima is leading the project. Also, and this is the best part, rather than designing it from the outset as an internal-only project, SE has yet to decide whether or not to release this to the public when it's finished. So there's a chance!]
One of our loyal readers is at the GDC Serious Games Summit, where he sat in on a Square Enix presentation about their "serious game" for the DS, called Project GB, used to teach game design. The game was developed by a small team, and allows "players" to first mod a Space Invaders-type shooter, then develop their own simple games that can then be shared with other players over the internet. Presenter
Tadashi Tsushima Ichiro Otobe indicated that this had a negative effect on productivity.
We all need to get jobs at Square Enix so we can play this thing. It sounds absolutely amazing. Famitsu has some washed-out pictures of the game. Check the link if you'd like to go squint at them.