I have a couple of points of clarification to make.

First of all, while money traded for virtual currency in most games is in the game permanently, the Linden Dollar is fairly easy to take back out. This, coupled with a set of tools allowing for user-generated content, means that people can, and do, make their real life incomes in this particular virtual world---selling things that aren't anything.

Second, the Linden dollar does not remain stationary at L$266 per USD, but fluctuates in value, like any other currency. Linden Lab does maintain some control over this, but it is not absolute. During my time in Second Life, the value has stayed between 240 and 270 Linden Dollars to one US Dollar.

I find it interesting that we are only now taking notice of virtual goods. We have, after all, been buying and selling them for quite some time. Software is virtual, although it can be argued that much of it has a real-world function. Still, people have been paying for screen-savers and desktop backgrounds and custom cursors for a couple of decades without attracting much attention. How are those things any different than a custom hair style for your avatar?