Massive Multi-player Online games (MMORPG) have virtual currencies, used by players to buy and sell various kinds of items within the game. A well known consequent phenomenon is the buying and selling of virtual items for real-world money, using specialized resellers or private auctions sites like eBay.
But I recently discovered that there is a site, IGE, The Leading MMORPG Services Company, located in Hong Kong, that not only trades real money for virtual money (at the moment supporting near a dozen virtual currencies), but also acts as a Market Maker for a sort of "foreign exchange" financial market for virtual currencies. The amount of exchanged money, although, of course, is orders of magnitude less than the real world counterpart, is however interesting: there are real world businesses that employ people in cheap-labour countries to play games, or to monitor bot players that "farm" virtual money within virtual worlds, money that is eventually converted into real money thorugh IGE, making tens of (or even hundreds) thousands dollars per year.
I had a look at the virtual FX exchange, but it seems to me that the bid-ask spreads are still too wide to make speculative trading profitable. I don't know if this is the consequence of a low liquidity, or a specific policy forced by IGE (however, I wonder whether this kind of trading could became a viable practice in a few years...). Also, it's interesting that exchange rates may vary between two different servers that host the same game and employ the same currency.

Also, another interesting practice is crafting within virtual communities.

My wife plays those multiplayer games like World of Warcraft and Star Wars Galaxies. With populations of real people in the millions, it's pretty insane. One thing I noticed is the "crafting" culture. On one of the games she plays, all the gear -- weapons, everything -- is made by players. You have to mine the soil, build stuff, it's neat.
She tells me there are people who are fashion designers, that make virtual (and real) money making clothes.
The art of crafting in many MMORPG can be just as sophisticated and as satisfying as being an artisan in the real world. Depending on the complexity invovled it can take a great deal of time to learn all the ins and out of an in-game crafting system.

...and crafting means design, style, fashion trends. Wonderful!

Update: the August issue of Wired has an article "The central bank of Sony", that reports that the total annual market for virtual goods is estimated to be $200 million, compared to $1.9 billions for the whole MMORPG sector. Sony's Everquest...

...is a place, with residents, sightseers, and an economy. It has trade relations with the US. Rather than an escape from ordinary life, it's an extension of it.

Update: another opinion on the rise of online games: 10 ways MMORPG will change the future.

Update: from BoingBoing quoting GameSpot:

The Chinese government is mandating that online game companies impose a three-hour consecutive play limit, with five-hour rests, on their players. Players who play longer than three hours lose levels and experience, and after five hours, your account is reset to newbie.

Update: Edward Castronova on doing social design and simulating economy with MMORPG.

Update: Paolo (in a comment) told me about a virtual strike on WoW.