Alternatives to Testing

In class today we discussed some alternatives to testing. The subject of participation quickly became a topic of interest, as we determined what qualifies as participations and what is just "nonsense chatter". I think a 'subcategory' of participation that could potentially be a good alternative to traditional testing is student teaching. Student teaching would require students to master the material well enough to present it to the class as though they were the teacher.
I have often heard that one truly learns something when he/she is required to teach it, so why not implement this idea in the classroom. By having students teach their peers, they become well-versed in the information, and they may even come up with methods of teaching to their peers that an older teacher may not have thought of. Students may even benefit from learning a topic from their peers in a way that is more relate-able. This idea does not mean that the teacher does not teach anymore and lets the students take over, instead, at the completion of a particular unit, the teacher can assign students to different parts of the chapter and have them do a short presentation to the class. Students who feel uncomfortable presenting in front of the class may opt to hand in a written version of their lesson plan, detailing what they would do if they did not suffer from social anxiety. Although this idea is not perfect and can use some improvement, I think it is a step int he right direction.
Do you have any ideas of testing alternatives that you have either seen implemented in a classroom or have implemented yourself in a student-teaching experience?