Don't know much about it personally
Basically its like interactive "SIMS", if you remember that game. You create your character and then you are thrown into this virtual world where you actually have to pay real money to buy land, build a house, etc. for your character. You then can go around in this world and just socialize, hold parties, go to certain "lands", etc.
Some educational classrooms are held in Second Life, yes, real classes for real grades. Advertisers are also getting into the mix and experimenting and there are even people who sit at their computer all day designing various objects, houses, and gaining and selling land like real developers and are actually making a lot of money selling their creations off to people too lazy to build their own or don't know how to design their own.
In this world every aspect of life is simulated including, yes, sexual intercourse. Your character can get naked and get into sexual positions with other characters. There is a video on Youtube of a "taped Second Life sex scene" and apparently you can do it all over the house, on tables, floor, beds, in the bushes, etc. There are also whole neighborhoods designed and dedicated to nothing but having orgies.
While there are some fun benefits to something like Second Life, it can get pretty seedy too.
