This may be something of a suprise, but Excel has even gotten the attention of Microsoft Research. Simon Peyton Jones, Margaret Burnett, and Alan Blackwell have written a paper that describes "extensions to the Excel spreadsheet that integrate user-defined functions into the spreadsheet grid". Of course, Excel doesn't do this... but, I wonder if that should be "Excel doesn't do this yet".
As a sidenote, this reminds me a little of how LabView handled subfunction definitions: subfunctions are defined using the same visual tools as top-level functions. It worked, but 'felt' a little heavy weight in actual use.