In the June APS Observer, Jillian Sherwin writes about research in the 3-D virtual world Second Life:
Peter Yellowlees, professor of psychiatry and director of academic information systems at the University of California, Davis, uses Second Life to simulate schizophrenic hallucinations. . . . Yellowlees interviewed three schizophrenic patients and recorded information about their specific hallucinations. With the help of actors, artists, and computer programmers, and with continued feedback from patients, Yellowlees reconstructed the hallucinations in Second Life.
Some universities are also setting up campuses in Second Life. For a list and more information, visit the Second Life Education Wiki.
And for a good chuckle, check out the Second Life parody at Get a First Life.
Read Free or Die 
I’m still not sure about Second Life. I’ve dropped in from time to time but my experience is much like this one described in Wired this month (http://www.wired.com/techbiz/media/magazine/15-08/ff_sheep) — big empty place without a lot going on.
My biggest disappointment in Second Life is with the graphics quality. You get what you pay for, and most folks connect for free and don’t invest in the infrastructure.
I’ve been thinking about online environments ever since I read Neal Stephenson’s “Snow Crash” many years ago, but overall, have been disappointed. I evolved along with the technology from IRC and MUDs to Second Life and MMORPGs but find that graphics almost get in the way instead of enhancing interaction. Maybe it’s connected to that argument of what is better — the book or the movie. When you don’t have to concentrate on words and use your own imagination to build an environment, your mind is not as active. That, coupled with mostly mediocre graphics, has left me wanting more.
Oh, well! Maybe in another 10 or 20 years…