Here's an interesting video showcasing the US Navy's Naval Undersea Warfare Center (NUWC) Division using virtual world technology, primarily Second Life (
Virtual worlds, avatars, 3D chat, online meetings - Second Life Official Site) for undersea warfare mission training. This video shows teleconferencing, rapid prototyping and collaborative engineering environments, training and education. Their exploration/investigation of Second Life use is showing tremendous potential for virtual world technology to military applications.
YouTube - UDT Europe 2009 Video Brief
In addition, the US Air Force and Army also have been conducting various "experiments" inside secure versions of Linden Lab's SL engine/servers.
-RODION