A very important essay discussing practice-based PhDs in the U.K. In the discussion Fiona Candlin fleshes out the complex relationship between academic legitimacy and artistic practice:
"The separations between theory and practice, artwork and academia have served to build and maintain specific competencies and authorities; supporting particular groups of people and their interests to the detriment of others. The practice-based PhDs, however minimally, have had an effect on these constructions of academic space, opening it up to a different constituency, to different forms of knowledge and of practice."
LeisureArts is eager to see these new "forms of knowledge and of practice" make their way to the academy here in the United States.
One relatively obscure, but hopeful example in the U.S. is at the University of Texas - Dallas. They offer a PhD in Humanities that offers a "creative dissertation" option.