This article will be very useful to us since it is about learning objects, but writting for a higher education context.  (The two rarely get written together).  Here's an extended quote [Thanks again to David Carter-Tod for bringing this article to my attention.  I get the CHE myself but too often get to swamped to see all the great stuff]:

A core feature of the learning-technology standards is building content with smaller pieces, called content objects or learning objects, says H. Wayne Hodgins, director of worldwide learning strategies at Autodesk Inc., a company that sells software to design online content. He is also chairman of a working group of the Learning Technology Standards Committee of the Institute for Electrical and Electronics Engineers. The pieces can be as small as a single chart, text box, or video clip. They can also be mini-software packages, such as tools to test students' understanding of material.

Content objects are like Lego blocks, Mr. Hodgins says. Every Lego block has the same size pegs, and that standard allows any block to connect to any other block. The learning-technology standards contain code to allow people to manipulate content objects in a similar way.

Dividing content into objects allows people to pick and choose what content they want to use and how to arrange it, Mr. Hodgins says. They can reuse old content or borrow just what they need from other sources, instead of creating everything from scratch each time.

Content objects are not only efficient, but they also permit creative combinations of media to improve student learning, says Nishikant Sonwalkar, an expert in online pedagogy and principal educational architect at the Education Media Creation Center, at MIT.