Hmm, this actually looks interesting. I've thought of balancing my wheels before, but I was thinking about some kind of little compact lead weight attached to a spoke nipple or something on the outside. This solution looks pretty decent.

I'd probably put a layer of very thin rim tape over them when finished, just to "seal them in" so to speak, and keep the edges from mucking with the inner tubes. My wheels currently have a double layer of Kaptan tape as their rim tape. It's thin stuff and would cover these little weights nicely.

Only drawback I could see of filling that space is when fitting very tight-fitting tubes, where you need all the space you can get with the bead scrunched in to the center of the wheel so there's enough slack to get the tire on. I'm sure it could be worked around, though.