Educational commentators have offered many pedagogical rationales for using Web 2.0 to support learning in higher education, and academics are being encouraged to find ways for their students to use social web technologies. Questions arise as to the value of these activities compared to more conventional assignments, and whether implementing such changes to student assessment is worth the effort. We conducted a survey of academics' assessment of students' Web 2.0 activities in Australian universities and found that this form of assessment is being conducted by a small number of academics, in a range of fields of study, but mainly in Humanities and Social Sciences, with varying kinds of intended and actual learning outcomes. Blogging and wiki-writing predominate, low and medium-stakes assessment are most common, and different methods of marking and feedback are in use. Qualitative feedback from the survey and follow-up interviews gave further insights into benefits and challenges of Web 2.0 assessment in relation to pedagogy, policy and practice. It appears that academics' conservative approaches to conducting assessment and their novice approaches to utilising social web technologies are factors which seriously limit realising the potential of Web 2.0 for medium or high-stakes assessment. (Contains 3 tables.)