I ran across a post by Nat Torkington on the excellent O’Reilly Radar blog echoing (more articulately) some of what I was trying to say in the podcast I posted about earlier today.

O’Reilly Radar > Second Life and the Future of Prototyping

The biggest appeal of Second Life from a creator’s point of view has been generous 3D building tools and the embedded event driven scripting language to control and manipulate avatars and objects. Cory is now adding the ultimate feature to the toolbox — Firefox embedded in Second Life.
Combine this with the aforementioned scripting language and you have a wonderful prototyping environment for real life gadgets, objects and experiences. Ever wonder how users would react to your new context-sensitive location-based social application? Don’t scratch your head for 12 months learning J2ME and phone intricacies, but power up Second Life and hook it to the web service you’ll be building anyhow.