An abstract from a recent Wall Street Journal article (via Murketing) on virtual relationships and their toll on real ones that sheds some light on cognitive processes in players' brains:
"On a neurological level, players may not distinguish between virtual and real-life relationships, recent studies suggest. In an experiment conducted at the University of Washington's Institute for Learning and Brain Sciences, test subjects were hooked up to neuroimaging machines while they played a simple computer game in which they moved colored discs to form a pattern. When told that they were playing with a person rather than a computer, participants showed increased activity in areas of the brain that govern social interaction.
Other experiments show that people socializing in virtual worlds remain sensitive to subtle cues like eye contact. In one study, participants moved their avatars back if another character stood too close, even though the space violation was merely virtual, says Jeremy Bailenson, director of Stanford's Virtual Human Interaction Lab, which was created five years ago to study social behavior in virtual worlds. "Our brains are not specialized for 21st-century media," says Prof. Reeves. "There's no switch that says, 'Process this differently because it's on a screen.' "