Just a quick thought.  I would argue that the main drawback to  
history of economic thought as traditionally taught is the dominance  
of a Whig theory of the history of ideas.  Thus, I think it is  
important to convey to students that the history of economic thought  
is vitally important for today's debates.  For my PhD course, for  
example, I teach the course as a series of debates since 1870s and in  
fact attempt to show that the way these debates were often resolved  
was questionable from a certain perspective -- thus the debate is  
still very much alive.  Or to use Kenneth Boulding's wonderful  
phrase, the debates are part of our extended present. 
 
I start the class with a heavy dose of contraWhig: Boulding's great  
HOPE paper "After Samuelson, Who Needs Adam Smith?", Jacob Viner's  
graduation address to Brown, "A Modest Plea for a Return to  
Scholarship in Graduate Education", Mitchell's introduction to Types  
of Economic Theory, and Karen Vaughn's recent HES presidential  
address.  This is to contrast with George Stigler's position or even  
the position of Mark Blaug (the rational reconstructivist position).   
If history of economic thought is viewed as _directly_ relevant to  
today's theoretical disputes, then it takes on an entirely new  
meaning to students. 
 
On the undergraduate level, I try to mix history of thought with  
economic history to show how economists were responding to social  
issues in various ways.  The book by Todd Bucholz, _New Ideas from  
Dead Economists_ is a nice supplement, and of course Heilbronner's  
book is great in this regard as well.  I have also found that the  
Breit and Ransom book, _The Academic Scribblers_ works quite well  
with the students. 
 
NYU just abolished History of Economic Thought as a requirement for  
the PhD. We have quite a number of faculty who teach in the area or  
related areas ... Bruno Stein, James Becker, Israel Kirzner, Mario  
Rizzo and myself.  Nevertheless, NYU was one of the last remaining  
PhD programs to retain the history of thought requirement ... now it  
is gone.  The main argument offered were: (1) the opportunity cost of  
studying the history of doctrine is too high and (2) all the good  
ideas from the past are incorporated already in the present. Thus,  
history of thought is a hobby, but not a worthy vocation.  That is  
our problem I would conjecture professionally -- as this is the  
common idea. 
 
Why not present the history of thought as it is dealt with in  
political science departments?  History of Economic Thought _is_  
Economic Theory, just as the history of political thought is commonly  
refered to as Political Theory.  It seems to me that the European  
Journal of History of Economic Thought has moved in the right  
direction by taking a very strong contra-Whig position.