I found this presentation by Matthew Hodgson a great overview of the ways “government 2.0” tactics are succeeding at home and abroad. Check out some of his screenshot examples online: FutureMelbourne (a wiki for citizens to design a better Melbourne), Powerhouse Museum (a Sydney museum that allows users improve its online collections through tagging, ranking and sharing information), and Bang the Table (a service facilitating public policy discussion).
What role will government play in a Web 2.0 environment? Matthew looks at examples from around Australia and the rest of the world in how governments are starting interact with citizens in online environments. He draws from his recent experience with a government department in planning and scoping a web 2.0-style project to show how easy it is to move into a government 2.0 world.