I happened on a blog that discusses, among other things, Second Life (you don't need to know how), and found what turned out to be a very interesting discussion on just what people think SL is and isn't.
My own opinion is that SL is pretty much what its users choose to make of it. Some prefer to make it all about business, destroying competitors, and being the end all and be all of whatever fan- or niche-based community they settle into in this virtual world. Others use SL to socialize — to connect with people who would otherwise be so far away as to make personal interaction impossible; through the magic of cyberspace, people are able to make those connections and grow from them. Still others employ SL as a way to explore their creative abilities and share the results thereof with others. You've got people who use it as another form of online gaming. Over there are the educators who use SL to enhance the experiences of their students. Then there are people who do some combination of those things, and much much more. The list can go on for quite a way.
Me, I fall into the combo category: I like to explore my creative talents (though I've admittedly cheated and gotten caught, but no need to go into that again) while socializing with people I ordinarily wouldn't be able to connect with. I consider myself much richer in terms of the bonds I've formed than I was before I discovered SL.
One point that was made by a few people in the thread including myself, and I happen to agree with this, is that while the activities we all engage in are pixel-based and have no more substance than the air we breathe, the people behind the pretty avatars are very very real. Our feelings are real, and the actions we engage in, both on and off the virtual grid of Second Life, can — and all too often do — have real consequences.
Fortunately, unlike real life, SL has a mute button. We can block out the griefers, the ego-driven stalkers and bullies, the card-carrying liars, the narcissists. Sometimes it isn't always possible to do that, like when people violate the virtual boundaries of SL to go after people in the real world. But for the most part, we don't have to put up with the drama. Once that simple thing is done, once that mute button is hit, we can go about our virtual experiences and have fun — the very reason SL exists.
Bottom line: whatever Second Life is to you, is just that, and what others make of SL is what they make it to themselves. That's the real magic of SL and similar virtual communities.