Second Life, documented in the video below, it is worth expanding this to look at the creation of real world cities.
The movie below by Sufis Angel, demonstrates the construction, using a collaborative tool set, of Las Vegas. Sadly Second Life does not allow the user to import their own models when compared to, for example, ActiveWorlds. It does however allow texture import, a set of facade photographs could easily be imported from say our London dataset to construct sections of the city in Second Life.
As has been mentioned before if you merged Second Life with Google Earth you would have a killer application...
If you have Second Life installed you can teleport direct to Las Vegas