I REALLY think that scripts should be hosted by avatars and not just by objects that are attached to avatars. It's been posted before (a few times) and I'd just bump but I want to make a case for this again.
I am a developer. I want to develop stuff to enhance this game. User interfaces. Take for instance my PowerBlog product. I would so much love to integrate blogging, with a complete blogging interface, with SL. I want people to be free to express themselves using the interface I build for them.
You already offer XML-RPC. Check.
You already promise scriptable 2D client-side UI widgets (windows, buttons, etc.) in a future release, or so I've been told. There is already some scriptable UI functionality. Check!
Now all we need is to host it all on the avatar.
Let the avatar script his experience and his interface.
I would settle for client-side scripting ability that has nothing to do with the avatar, IF ONLY it could affect the in-world experience and interact with the world as associating a script with the avatar would.
On the other hand, I think that if it can be made to run on the client only and not interact with the world except to automate things like XML-RPC calls or attaching things to the avatar, it should be enabled in "no-script" areas. "No-script" areas are an imposition to those who have harmless scripts that help people just automate tasks.
Ultimately, though, the objective is to make scripting contextual to the user rather than to objects held or attached to the avatar. It's called abstraction.