(MCT) — Ailin Graef, reportedly the first person to become a real-life millionaire through Second Life, knows first-hand what it’s like to be on the victim end of a “griefing,” or being harassed while in a virtual world.

Last month, she had just started an interview in Second Life with CNET, the network devoted to all things tech. Suddenly, she and interviewer Daniel Sadville were bombarded by sexually graphic images. A hacker had broken into the system and rained anarchy on Graef’s parade for 15 minutes.

This incident underscored the dangers of a site like Second Life, which could mirror and magnify those of the Internet in general. The San Francisco Chronicle recently speculated what might happen if another avatar approached yours in Second Life and, using your real name instead of your protective SL pseudonym, said, “I know who you are. I know where you live.”

“Technology moves a lot faster than the law and the culture,” said technology and privacy expert David Holtzman, a former chief technology officer at Network Solutions and author of “Privacy Lost: How Technology Is Endangering Your Privacy.” “Second Life does two things that are interesting. They charge you for real estate and they don’t claim intellectual property over people that build on their site. So you have some lady making $65,000 designing dresses on Second Life and both are in danger from hackers.”

Holtzman said he’s a fan of SL, but warned users they shouldn’t get so wrapped up in the fantasy that they forget reality. Hackers from outside the site as well as other “in world” users could pose a danger. “People act like they’re in their bedroom, because they’re typing in their bedroom,” he said. “But (it’s more like) they’re in Marseilles, at two in the morning, walking around drunk on the docks.”

Second Life does have explicit terms of service that, if violated, can get a user kicked off. “If you’re caught, you’re banned from everything,” said Catherine Smith, Linden Lab’s marketing director.

In addition to harassment and hacking, Holtzman worried about companies being spied on while having virtual meetings in SL. And he would also like to have the “rights” of an avatar legally spelled out, though he’s not hopeful that will happen soon. “I cannot imagine this particular Congress debating avatar privacy as one of their issues,” he said.

Currently, Linden Lab is the arbiter of virtual justice in Second Life, but as the site grows beyond its ability to handle all disputes, it would like to see some sort of court system evolve organically out of the users themselves. A Linden Lab spokesperson conceded that complaints about griefing and other issues are “a regular occurrence” as there are upward of 20,000 people on the site at any given time.

“In the real world, you’re safe not so much because of the cops but because of the neighbors and the community,” said Holtzman. “I believe Second Life is going to be the place where those kinds of communities are going to develop.”

Of course, there’s the obvious complaint that Second Life — like television and video games before it or the Internet in general — is just another isolating agent, another barrier between people and the real world. But Second Lifers aren’t buying it.

“The online world is as real as the physical,” said Anne Beamish of the University of Texas at Austin School of Architecture. Beamish, a professor in the graduate program in Community and Regional Planning, has had students do class projects in Second Life. “If you’re there, it’s real,” she said.

“A lot of people can’t leave their house or can’t participate in real life,” said Linden Lab’s Smith. “And Second Life is real. There are real people behind every avatar.”

“If you’re substituting it for your TV time, what’s the difference?” asked Gary Leland of Arlington, Texas, who keeps one of his computers logged into Second Life much of the day and devotes roughly a couple of hours per day to the site. “Now you’re at least talking to someone.”

But he doesn’t quite understand those who go “clubbing” or engage in more intimate SL activities. “My wife gives me a hard time about it. There are lonely people, I guess,” he laughs, recalling a time he teleported into a room where, it turned out, avatars were having sex. “I said, ‘I don’t know what’s going on, but I’m getting out of here.'”