One enormous effect that I have seen in the classroom, in terms of writing, is the decline of a student's ability to write using complete sentences and complete words. Using shorthand language developed for cellphones shows up in student writings and it drives me crazy. It's almost as if many of these kids believe that using a cellphone to communicate will be the only method of sharing information in the future, and everyone one will use "How r u?"
I am also dismayed at how students see no point in using a dictionary, doing math by hand, or learning to spell words correctly. What happens, though, when there is no phone to calculate, no spell-check (or worse, one that offers incorrect choices that students mindlessly accept), or a student uses "grey" words/phrases, like "a lot" or "lots" or "said?" Writing becomes so much more engaging with the words selected are colorful, powerful and/or otherwise imposing. Mediocrity seems to be the choice: technology offers immediate gratification, and a machine to think for the individual.
On the other hand, technology can open the world to the mind of a curious kid who wants to learn and report about how pencils are made, who the first man in space was, or what spina bifida is...because his best friend was born with it. And in terms of educating, computers make information available to students for districts that could never afford the number of books their students might need. Instant access can feed a kid's desire to learn. However, teaching everything via PowerPoint presentations, however high-tech the presentation, limits a student's ability to learn in a variety of ways.
Like anything, there are positives and negatives: perhaps what is most important is how we guide our children towards using technology. We need to make sure they read, too. When doing research assignments, kids need to understand why primary sources on the computer are preferrable to secondary sources, and that just because it's online, does not mean it's a good source—or even true.
As mentioned above, using it selectively, and monitoring its use (rather than sitting at a table and chatting with another teacher or grading papers) is necessary to make sure it is of value to the student in the classroom.