I heard about Second Life from a recent Rocketboom podcast episode. Second Life is a complete online virtual world. You can access this world for free, but to actually own land, etc., you need to pay a monthly fee. I have not actually had the chance to jump in and give it a try, but it looks like fun.
Star Wars Galaxies is another online virtual world that I’d love to explore…however, that does not have a free version.