I'm a professor with Anchor Baptist Bible College, as well as many other roles (including internet guru here, PostgreSQL RPM maintainer, nspostgres driver maintainer, and a few others). We are test-driving dotLRN for our needs.
The biggest thing I can see for distance education for us is online testing, whether multiple choice, fill in the blank, or essay questions. ArsDigita's Quizze module did a great job on multiple choice tests -- however, unless I am missing something, OACS doesn't have this module.
Also, a gradebook portlet for professors would be nice; transcript utilities for the registrar (with import from the gradebook, course); a catalog portlet (with interactive preregistration) would be cool as well. As I think of other things we could use I'll post.