Moodle’s External Link resource is one of the most flexible in the educator’s/course creator’s tool belt. To date we’ve been using IMS Global’s LTI 1.1 standard to provide access from Moodle to an assortment of 3rd party tools(or even other Moodle sites). The value is an uncomplicated SSO system that provides the minimum amount of data required to allow students to work on a 3rd party system to interact, socialize, or even take a test. In other LMSes it’s called bLTI (b as in “basic”).
Vital Source Technologies (perhaps known to you through their ebook service or recent acquisition of CourseSmart) is proposaing to upgrade Moodle’s LTI capabilities to the 2.0 specification available through IMS Global: http://www.imsglobal.org/blog/?p=184.
What’s the benefit? In short the process of setting up an External Tool should be much simpler to the end user and the supporting features more robust. According to the blog post at IMS Global announcing LTI 2 (in late 2012),
Via Miloš Bajčetić