I've been playing around with using playlists to feed a smart playlist that dynamically updates and drops recently played songs, but of course I can't move tracks aound in that directly, I have to jump up to "Up Next" to explicitly cue or delete songs... and I can't leave the "Up Next" panel floating while I'm browsing my library. It's a poor substitute for Party Shuffle / iTunes DJ. It's like going back to 2003.
Come on, Apple, get with the (cover)flow.
In the meantime, I'll hold off updating to iTunes 11 at home, I'm just glad I updated on my work computer first!