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At this point it appears that gameplay will be focused on human avatars, who can own their own living spaces and offices, buy and sell goods at a virtual mall, and interact with each other in public places.
While there are a number of online games that offer impressive graphics (though none of this caliber), the real potential behind LivePlace and the OTOY engine is the cloud-based rendering engine, which allows games on almost any computer to play without needing a powerful graphics card. OTOY has been developed to work in any browser without a plugin, which makes the barrier for entry into this virtual world much lower than Second Life.
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A new Olympic type LL competition was just announced. Synchronized butt puckering.