Having students create something to demonstrate what they understand takes a little more time than taking pencil and paper multiple choice tests, but if done the right way tell much more about what a students does or doesn’t understand. When appropriate for the topic, one activity I liked to do in my class was have students create online posters showing what they understood about a specific learning objective.
My favorite site for this is GlogsterEDU. There are free and paid versions, but almost everything I wanted my students to demonstrate could be done on the free version. Be sure to steer clear of the normal Glogster website in your classroom as it could have some school inappropriate examples.
A new online poster site that I just discovered is Webdoc. It looks very similar to Glogster but since it is still in beta it doesn’t seem to have an EDU version. Definitely check it out on your own before letting students use it.