Virtual worlds such as World of Warcraft certainly are real. They are real virtual worlds, made up of physical components. We can even look at those components and learn about how they work.
The distinction between "virtual reality" and just "reality" is that "virtual reality" tricks the observer into thinking that reality is one thing when it is really another. The trick is very real, however, and it is an observation of the components. It's just a misleading one when one approaches the virtual reality with certain assumptions about it.
OK, well I'm convinced I'm being tricked, hence my use of the word 'illusion.'
[ih-loo-zhuhn] Show IPA
something that deceives by producing a false or misleading impression of reality.
the state or condition of being deceived; misapprehension.
an instance of being deceived.
Psychology . a perception, as of visual stimuli (optical illusion) that represents what is perceived in a way different from the way it is in reality.
a very thin, delicate tulle of silk or nylon having a cobwebbed appearance, for trimmings, veilings, and the like. http://dictionary.reference.com/browse/illusion?s=t