I had some similar thoughts-and asked the students to watch Chatfield's talk. Unfortunately, our social network (wall.fm) is down right now, so I'll put some of their comments on here later.
My conclusion though, is that it is complicated. Kids like the constant rewards, but they are sophisticated enough to know that those aren't good for them.
Edited because my social network (wall.fm) came back up.
Here is a student quote from our discussion:
One feature found in video games that is extremely useful in the real world is the idea of rewarding participation. In Halo, after each game played whether you get first or last place every player gets the same amount of game completion points. This is effective because no matter what the player’s skill level is they still receive some points This points system is already used in my Spanish class and I find that I do focus more and try to participate because I know that by doing that I am earning daily points.
One dangerous feature of video games is how addictive they are. When the player gets caught up in the virtual world it is easy to loose track of time. I just recently looked at my Halo play timer, and for a game that came out months ago I have spent 2 days and 8 hours of my life playing in a virtual world. This can be harmful because if students are rewarded in school they might expect rewards in the real world which isn’t going to happen.