Web 2.0 is beyond a jargon describing technological transformation: it refers to new strategies, tools and techniques that encourage and augment informed, creative and social inter(actions). When considered in an educational context, Web 2.0 provides various opportunities for enhanced integration and for improving the learning processes in information-rich collaborative disciplines such as urban planning and architectural design. The dialogue between the design students and studio teachers can be mediated in various ways by creating novel learning spaces using Web 2.0-based social software and information aggregation services, and brought to a level where the Web 2.0 environment supports, augments and enriches the reflective learning processes. We propose to call this new setting Design Studio 2.0. We suggest that Design Studio 2.0 can provide numerous opportunities which are not fully or easily available in a conventional design studio setting. In this context, we will introduce a web-based geographic virtual environment model (GEO-VEM) and discuss how we reconfigured and rescaled this model with the objective of supporting an international urban design studio by encouraging students to make a collaborative and location-based analysis of a project site (the Brussels-Charleroi Canal). Pursuing the discussion further, we will present our experiences and observations of this design studio including web use statistics, and the results of student attitude surveys. In conclusion, we will reflect the difficulties and challenges of using the GEO-VEM in the Design Studio in a blended learning context and develop future prospects. As a result, we will introduce a set of key criteria for the development and implementation of an effective e-learning environment as a sustainable platform for supporting the Design Studio 2.0.