Why Use Student Webpages?
In addition to serving a socializing function within the class, student Web pages can also serve as a repository of information collected and assignments completed during the semester--a sort of online portfolio that can be reviewed and evaluated by the instructor or by other students. Thus, such pages can play a part in student assessment.
As the instuctror, you'll need to set the limits, if any, on what students may post or how they might otherwise use the pages.
How to Provide for Student Web Pages:
Some course managment tools, such as Blackboard, use Web-based templates to provide some very limited functionality and space for students to "post" a page. Within such course management tools, this functionality may be distinct from the functions that allow for two-way communication, the posting of materials, and the submission of assignments, etc.
In other cases, educational institutions provide -- or are willing to provide -- students with space on the school's Web servers. In fact, students are often afforded quite a bit of space. However, they may need to be made aware of the fact that they can create and post such Web pages, and they may also need training in the tools (e.g., file transfer programs) and skills (e.g., Web authoring using HTML or some specialized software) involved in Web page creation.