My encounters with distributed cognition are proving very fruitful. Andy Clark's work is particularly interesting - he has a take on the moral side of all this. However, I'm not so keen on the emphasis David Chalmers (who Clark has worked with) puts on the singularity nonsense, or whether whole brain emulation (brain uploading) is a sensible way to look at things. Anders Sandberg's 2nd life lecture is fascinating though and inspired me to sort out our Moodle-SLOODLE installation.
What we need is good models which can help us take useful practical action. Cognition sits behind human organisation, and the emergent issues of organisational intervention (including intervention with technology). I think a cybernetic model of distributed cognition might come in handy... like the one developed through the JISC SPLICE project (above). The strategic evidence for the efficacy of this is growing... which makes the whole area very exciting!