One of the joys of having a PhD in astrophysics, having worked on a project sponsored by the European Space Agency and having researched and taught satellite remote sensing, is that I can use that sad old cliche "It's not rocket science" with some authority.
Peer review of teaching is one of those areas that, despite the hooh-hah it has caused where it has been enforced inappropriately as a management tool, falls straight into this category. Despite the simplicity of the idea it is not widespread in HE practice. I suspect that a large part of the reluctance to engage is cultural. Traditionally, the lecturing dimension of academic practice has been a relatively solitary affair, with a single lecturer teaching their own classes in the way that they feel they can best cope. Of course there are excellent examples of greater collegiality in many departments and there are big differences between disciplinary areas, but it is still the case in many institutions that even discussing teaching issues is in some ways a sign of 'weakness' - there's a danger of implying that you're not a serious researcher if you start conversations about teaching, or that you are insecure in some way about your capabilities. I've come across this sort of attitude in many institutions and of course it represents a particularly perverse and twisted view of the lecturing role, but it is still sadly prevalent.
So we need to be cogniscant of these cultural contexts and the internal politics of departments and institutions whenever we are suggesting change. In our own humble way we have tried to introduce a non-threatening, simple approach to getting colleagues to share ideas and begin to break down these needless barriers between disciplines. In a sense, we're recognising the virtues of some research practices, particularly the fundamental concept of peer review upon which much of what constitutes 'legitimate academic knowledge' rests. Such schemes are of course already in place in many institutions, but the local contextualisation is often the critical factor in determining success or failure.
Anyway, what I'm talking about is the newly re-labelled "Partnerships for Learning & Teaching" which has grown from early pilots of peer observation to now encompass the more general peer review and mutual support for any aspect of teaching or course design. Have a peek at Sharon Flynn's explanation of the scheme.