It is difficult to communicate information about 3D structures, so a tool to make that easier should be very useful. It is important to understand why a simulation of LEGO might be better than a physical LEGO model. A real LEGO model is inexpensive, its 3D structure is readily apparent, and the act of contructing the model is an important part of the learning process. One reason is to augment the real with the invisible, such as force vectors, rotational velocities, and dimensions. Also, you can simplify and create abstractions with a graphic diagram - this is what makes diagrams so powerful.
Images Here are some images produced by the system.
Note that these are stills. The actual software renders these frames at 30 frames per second, so you can watch the gears spin and move around the model in real time. I'm learing how to make an MPEG from the system. If I figure it out, I'll post it here. Click on the image for a full size version.