as for the terminology and stuff, I suggest you come up with a catchy neologism and start using it normally when you talk about these things, many technology related terms that currently are accepted as technical jargon have gone thru that route (or a similar one)

http://en.wikipedia.org/wiki/File:MagrittePipe.jpg

(Yeah, I’ve used it again. It’s SOOO handy as a kind of visual shorthand for talking about virtual environments.)

Since the technologies and applications of things virtual are developing and diverging faster than the language, it is no surprise that the terms are not adequate to the task of providing clear definitions, meaning no more and no less than what is intended. It is, however, unfortunate, I agree. And it is likely to stay a mess for another reason. Only a parametric taxonomy of terms can be guaranteed to remain indisputable, but such taxonomies are always unweildy and therefore unpopular.

And in the area of virtual worlds we have another problem that is superimposed over the one to which you draw attention. There seems to be very little clear thinking about what in virtual worlds is real and what is virtual. An insult in a virtual world may well be a real insult, both by intention and perception. A dog in a virtual world is not, however. Even so, both insults and dogs cause equal confusion. The insult can be shrugged off as ‘role-play’ and therefore open to question, interpretation, and endless argument. The dog gets called a dog for convenience, not ‘a representation of a dog’. What is more, people are inclined to act as if it IS a dog. So, we lack an efficient and effective vocabularly, but it’s much worse – we’ve buggered around with the vocabulary we thought was pretty safe, and drawn every other term into the mess, too!