This chapter outlines the potential benefits of incorporating Web 2.0 technologies in a contemporary higher education context, and identifies possible ways of doing this, as well as expected challenges. It uses the University of Southern Queensland (USQ), primarily a distance education provider, as the context for many of its case study examples. In particular, it addresses the important role of the allowances of particular learning management systems (LMSs) in pedagogical applications of Web 2.0 technologies. Overall, this chapter argues that the goals and ideals of Web 2.0/Pedagogy 2.0 can be achieved, or at least stimulated, within an institutional LMS environment, as long as the LMS environment is in alignment with such goals and ideals. It uses the implementation of Moodle at USQ as a case study to reinforce this argument and explore which factors potentially influence a shift in thinking about learning and teaching in a Web 2.0 context.