Photoshop: Displacement Filter Overhaul. Live preview of Displacement.

I wonder if this would have to compete for resources with Warp-improvements requested in at leat one other thread, though, as both might be considered as having similar applications. 

My thoughts exactly!

I see it as having as much of an application as puppet-warp or perspective tools. I see fairly regular posts about "How do I warp a logo over a shirt?" or "How do I wrap a texture on a face?" that invariably devolve into "Well, there's the Displacement map, but I don't have 40 min to describe how to use it, so here's a link to a youtube video..."
In a perfect world, the interface would be similar to the liquify tool with the option to apply a texture or layer mask as the displacement map, then a realtime preview with a brush to change the map.

Heck, you could piggy-back onto the existing liquify tool dialog and distort the liquify mesh with an optional "diplacement map" section with the option to use a particular layer or alpha channel and pixel displacement adjustements. This would have the added benefit of making the displacement map feature more visible and available to consumers. Plus it's sexy marketing to say "Liquify Tool now included pixel-level micro adjustments through height mapping!"
Adobe, YOU'RE WELCOME!

+1 

Unfortunately I am not optimistic on this as I suspect very few Photoshop users use the Displace Filter even halfway regularly ...