CASA in Australia makes uses of an internet connected PC to take the PPL exam - just a simple 56k dial-up was sufficient (Other exams are also available)
It uses a special secure browser that takes over the OS to prevent the user opening or starting any other applications at the same time (a bit like a Kiosked PC).
The program guides you through the questions and provides a running timer and makes changing your mind much easier!
The program is started by a FI based on his license number and confirming with Photo ID you are who you say you are. At the end the test is submitted by the FI back to CASA for automatic checking (and recording). The student's result is instantaneous and can be printed-out for the CFI to go over questions that were wrong.
You'd think with the revenues and numbers of students the CAA could probably do this quite easily.
A sample exam is available at:
http://www.casa.gov.au/avreg/fcl_lic.../cyberprac.htm
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