Briefly, secondlife is a virtual world with a real economy. People can buy land, build houses, offer services and so on. And the currency in the virtual world can be used in real world. So there are people who are making real moolah by offering services or trading in secondlife. At first it sounded crazy to me, but people are spending there and thats the reality.
This obviously has interesting (and perhaps at this point, unfathomed) implications. There is a claim that there is $410m worth of creative effort happening inside secondlife every year — that can add up quickly. Where does the economic benefit that people can reap in a virtual world start overtaking that in the real world — in some sense, the virtual economy starts competing for talent with real economy — especially with all the low cost of labour we have in India! Go imagine.
Tactically, I think this is one good way for some social networking sites to offer something compelling — provide social networking in context of virtual worlds that to an extent, map real places and buildings and people — of course, much less heavy in terms of computing and bandwidth requirements.
Btw, I am on secondlife now, and I am called Alok Blackmountain there They dont have Mittals!