Does anyone think a simulation software program that works in a live environment which walks learners through step-by-step practice tasks and scenarios would be valuable?

I think it would be expensive... the value is debateable. It depends a whole lot on what you're simulating, how often the procedures will change (updating simulation software gets mighty expensive), how you will ensure the individual can actually do the task in reality...etc....

You can simulate using a fire extinguisher, but pointing and clicking is nothing like holding the real thing.

For software simulations, you can have a look at DemoCreator
www.sameshow.com/demo-creator.html
Also Captivate and it asks for some advanced tech skills.

Although I tend to agree with FF- <insert "Ain't Nothing Like the Real Thing, Baby" soundtrack here>, I do think online walkthroughs or demos are very helpful to introduce and orient users to activities to optimize the hands-on.

Tons of great software out there; just be clear on your needs. Waaaay back when this all started, we did "choose your own adventure" type of simulations with images and HTML image maps that branched throughout a site with feedback, etc...

It's not the tech, it's the design that drives the value.

Again, FF is fundamentally correct- practice won't hurt certainly, but just be realistic about costs to produce and the benefits it would provide versus just getting to it (in the end, that's where it counts).

I agree, David -- absolutely nothing wrong with practice. Perhaps what needs to be specified here is what kind of content we're talking about.