MultiGen-Paradigm jumps on the KML bandwagon with version 3.1 of their Creator software.
This company is into making software tools for creating real-time 3D content. I don’t think an export function to KML in Creator is suddenly going to allow us to drive around in virtual cars on Google Earth, but it did lead me to think that it would be rather nice to have a physics model in Google Earth, one day maybe, so that we could fly around in it if we were so inclined. Or perhaps, slightly more realistically, tracking the International Space Station could soon be done using a real 3D model rather than a 2D icon. After all, if the resolution of some maps is down to decimeters, then an object the size of a bus could be represented faithfully.
Actually, I see no reason why you couldn’t put a 3D space station model in now. The hard part would be getting it to follow an orbit. It would be easy to just place it above a single location. But, you could put it in orbit if you used a separate application to control the position of the 3D model with once a second updates or something. Just not for a large audience.