I have been catching up on the events of GSummit over the weekend. I was very heartened to hear so many people talking about moving beyond badges and xp systems. They were looking for the next phase of engagement. You just need to look at FourSquare recently ditching its gamified elements to see that we are hitting the first big dip in user interest in this kind of thing.
However, there were still quite a few talking about promoting engagement with the use of simple badging / xp systems. I must admit, at first I was a little confused. Then I realised that I was totally missing the context that these ideas were being discussed in.