I have seen a number of tools that are similar, one way I wanted to set this project apart was with a simple interface that even non-technical teachers could use. I decided early on I wanted the application to be latex-free. Creating the equation renderer from scratch was a bit of overkill (the engineer mindset "oh it'll be easier to write myself"). This is something I hope fix and instead plug in a more complete and better tested alternative like JLatexMath, with actual editing capabilities. Pulling the editor out of this application looks promising http://mirai.sourceforge.net/.
If you look at Khan-Exercises they have actually moved away from automatic generation (see their Perseus project), because it was too hard to write the kinds of problems they wanted. Also internationalization when the content of the questions was dynamic caused them more hassle than it was worth. I am considering de-emphasizing content creation and focusing on the student solution interface, as I believe it is the more novel feature of the system. But for now I wanted to get some teachers using it and find out what they found useful.