As a module developer, I've had a lot of frustrations with how date and time formatting currently work in Drupal through versions 4.7. I think we can fix this, and I'd like to get other people interested in this issue to discuss how we can do this.
As part of this work, I'm probably going to package my current work as a module that publishes an API that does what core currently does, and a bit more that I think it really should do. The module will be developed for Drupal 4.7.