I like the idea of them releasing the rights to a regular version. It will be interesting to see community theatres tackle it. I was in a musical revue last year and two of the performers in it gave a very enjoyable performance of "Mix Tape," complete with puppets. As long as there are able pupeteers out there, Avenue Q can be a very enjoyable show for adults to do.
As for the school edition... ick. It really depends on what's deemed appropriate and what's not. I'm sure "You Can Be As Loud the Hell You Want" will be cut as well as "The Internet is for Porn" but besides those, all of the other songs really depend on what your definition of appropriate is. I saw Avenue Q when I was in eigth grade sitting next to my dad and neither of us felt like it was extremely innapropriate. Plus, there are some good messages to teenagers, if you look behind the adult humor, especially about commitment.
Cosette: Roses are red.
Marius: Violets are blue.
Eponine: You're so in love!
Marius: And so not with you.