I've used Excel as a graphing tool for "numerical animations" and "situational graphics" both of which give a way where online is better than paper. The ability for the student to change the environment to "see what is going on" makes the information in the graph much more understandable by the students. Below there are some links to this content so you can see what I'm talking about.
The numerical animations are called Excelets. At this site there are examples, some descriptions, and a tutorial for learning how to make them. I've made some others that are designed for a specific textbook by Besanko and Braeutigam. Some examples of situational graphics can be found in this assignment on supply and demand (after completing the login tab go to the Trade tab or the Scale tab).
When I've taught intermediate microeconomics in the past, it was clear that many students weren't comfortable with reading graphs. Perhaps this is why some economists other than myself have become involved with educational technology. These economics course pose some vexing teaching issues. The course is about economics. Math is the language of economics, especially the language spoken by academic economists. It is not a language that many students are comfortable with, including business students, the vast majority of whom got high scores on the math part of the SAT or ACT. Teaching economics the way an economist would like to teach the course exposes a weakness in the educational background of these students. (Conversely, engineering students like to take economics to fill their social science gen ed requirement because of the reliance on math.)
Many of my colleagues who teach intermediate micro have overtly opted for making it an applied calculus course (relying on Lagrange multipliers for the consrained optimization and the implicit function theorem for the comparative statics, which is the heart of the course). Since embracing the Web, I've taken an analytic geometry approach. The self-selection among the students means that all those who needed to take intermediate micro but were weak in math wanted into my section, which made things even harder for me.
Let me return to Excel. Through clever use, and at some point in the near future I probably should write an article about the tips and tricks behind the clever use, I believe that one can offset these difficulties and perhaps even get to the point where the students enjoy the course and feel they have gotten something out of it. There is the added benefit that the technology allows the instructor as content designer to think about how to represent the material anew - some of what I do with Excel you won't find in any textbook.
In terms of the representations, one of the key ideas is that instead of comparatives statics, which would be done with calculus, use animations which make clear what is changing in the environment and the consequence of those changes on the equilbirum. Since the student can see the change as a movie, the ideas come through much more clearly. Moreover, the students who want to see what is going on to generate the graphs can look at the cells themselves and figure it out that way. Since the students are much more comfortable with numbers than with algebraic representations, this particular type of representation is more in their ballpark.
An entirely different use of Excel, one that would work in a host of different courses, is to do "nested quizzing." Let me say first that most of the course management system out there, and although it is some of the functionality I'm talking about I'm including Mallard in this list, basically views each question of a quiz as independent of previous question, other than that they are wrappered within the quiz and delivered in a particular order. One can do much more tight integration of the quesitons, where the follow up questions depends on the response to the previoius question, by the use of IF statements. Excel has IF statements (and a lot of other built in functionality which is useful) so you can deliver something that is quite flexible. And apart from learning the syntax of Excel, there really is no need to program. All of this can be delivered without writing scripts. That is power.
So my belief is that one can develop much higher quality content with Excel and students get the responses to what they do instantaneously. Where it is weaker is on the record keeping of the student work. But there are some tricks that way as well.
The last point here is that the approach can be moved down to K-12, without the need for expensive software on top of it. There is the potential for a huge social gain here if the colleges were to develop Excel content appropriate for high school course.