We applied this very idea to a portal design project that started a little under a year ago. It's not in production yet, *cross-fingers* but the first six months got every bit of contribution from the stakeholders that we could wish for. I'm quite willing to give a good chunk of the credit for that to the inspiration from Buxton's book (hmm, perhaps it's time to read that book again).
Today a colleague of mine pointed to the "guimags" website. They promote a way of developing user interfaces using magnetic gui elements on a whiteboard (combined with whiteboard markers). They have even written a book about it called "The Unplugged". I believe this is an intersting addition to a toolkit for interaction design. It's not a substitute for mockup and prototyping tools like Axure, balsamiq or napkee, but it's sure something that lets the number of throwaway prototypes go way up without adding much or anything to total project cost, so that alone means it's probably a neat idea. (Also, in the spirit of full disclosure, I'm getting a free ebook for having blogged about this :-)