Sounds promising. I have some suggestions:
Functionality of this plugin combined with the combination of the Secure Invitations plugin would be the wet dream of privacy nuts.
Adding user roles for people capable of inviting and accepting new users (these are not necessarily the same people) would make it just incredible. N.B. in WPMU it makes sense to have these roles site-wide, not blogwise. With the coming merge, it's a good idea to make the plugin WPMU -proof.
Further, make it play nice with buddypress (like the above plugin) and you can't believe the amount of kudos you'll get from the bp-community :-)