Multiple Attendees in the Same Classroom: Problems?

There are a few concerns that I would look into.

1. Audio - As you mentioned the audio feed back looping may be a problem. If everyone has their computer speakers on and hot mics, then you will almost certainly have an echo or feed back loop in the audio. If everyone wears a headset, then that won't be a problem. You can try using the Speex codec and see if that helps, but it may not resolve all the audio issues.
2. Bandwidth - Keep in mind that everyone will be demanding the same bandwidth, and this isn't an ideal situation for having multiple users in a single location. I'll stick with conservative numbers to keep things simple, but you can do some testing and see where the bandwidth demands will fall. The live video component will likely demand 200-600 kbps per individual. So, this means that there will be a potential of 2.4 - 7.2 Mbps of up-bandwidth and 26.4 - 79.2 Mbps of down-bandwidth needed for the video alone.Start factoring in audio, screen sharing, video broadcasts and other things you may be doing in the Connect room and it will only make those numbers larger. You can start to do some initial calculations using the next to last page of this document, http://www.getconnect.com/wp-content/uploads/Adobe-Connect-9-Technical-Guide.pdf. The math you want to use is up-bandwidth demand X the number of people pushing to the server and down-bandwidth demand is bit rate X number of streams X number of individuals in the room.
3. Practicality - I think it would be overall easier to do this with a one or two computer setup. One computer could be the instructor, with their content showing on a projector and a camera on them and a second computer with a camera on the group, and possible a USB Speakerphone placed centrally to capture the audio of the group as they speak.