3dIsRubbish

Basically 3D graphics are a bit rubbish. No-one has ever found a use for interactive 3D graphics except a) CAD models of things to be manufactured, and b) games.

Everything else, from VirtualReality, to VRML to Second Life tends to be a flop.

Bear with me for a minute ... :-)

The reason is that, fundamentally, 3D is all about occlusion. (Remember that one of its earliest, most fundamental techniques is "hidden line removal").

Yes, it always looks cool. But for most applications, you want graphics to help you SEE things, not to help you hide them. Visualisation is meant to make ideas clearer. Maps and plans of a room show you more than a photo of it does; measurements and comparisons are easier when you can ignore perspective.

Games are the exception because with games, it's all about the excitement of the monster jumping out from the shadows. And with CAD you sometimes need to see how the final object will look.

But for no other application does a 3D rendering convey more useful information, more efficiently than a 2D one.

Want a meeting in cyberspace? It's way easier to search for someone and click a link to get a video feed than to trudge around a virtual model of an office block in order to see an avatar.

Want distance learning? Well, the traditional class-room and lecture theatre are getting disrupted by students messaging each other and cross-referencing on Wikipedia while expecting to tweet to your back-channel. In other words, the physical space is dissolving into text streams. In this situation why would anyone want to recreate the rejected architecture of the school-room and "audience watching a teacher" pattern?

I agree with most of what VenkateshRao says in his answer, but disagree that there could be a useful or compelling 3DVW. There is nothing that 3D does better than 2D except games.

And if Second Life is a game company it has to accept the laws of games. Games go out of date and need to be continuously refreshed : with new generations of graphics, new controllers (I guess Kinect integration could potentially help SL here), new challenges etc.