It took me quite some time to grasp the concept behind Second Life. Second Life is kind of a computer game. You can think of it as a multiplayer game. The main difference is that you don't just play with 8 or 10 players, but you are playing it with hundreds of thousands of players at the same time and you can interact with any of them while you are playing the game! Another crucial difference is that the game never ends. You just log in to the game at any time and you find it going on between the massive number of people playing in it. There is no win/loose situation like in regular games.
The interesting thing about Second Life, and similar 'games', is that you can build stuff inside the game. You can build a house, you can talk to other players, you can move around and you can buy things. The mind boggling feature of Second Life is that you can buy things with real money! This concept is the hardest to understand at first when you are new to Second Life. Yet there are people making a lot of money buy building houses for example in Second Life and selling such houses to other players in Second Life! You might think that this is kind of crazy, but think of it as someone painting a picture and selling it. The people who are building or making things inside Second Life and selling them with real money to other players are like those painting a picture then selling this picture or design to others. In Second Life, you buy and sell using artificial money inside the game, but you can later go ahead and exchange such artificial game money with real US dollars. That's the really amazing thing about Second Life and the most difficult concept to grasp at first. You can try Second Life for yourself to be able to better understand the whole concept behind it.