But when you make the split between virtual and real worlds (including your friends in both), the brain's center for imagination tends to light up whenever you consider the virtual world. You've got the normal parts of your brain working when thinking about yourself or others, but when you add in the virtual component, the imagination center lights up as well.
There's more work to be done: researchers only tested WoW players for this study, and they suggest that people who don't play online games as much may not think about their characters and themselves in the same way. They also say in the article that the avatar serves as "a better version of yourself" -- you have the same sense of ownership and self, but with the added bonus of imagining that you can be better in whatever way you want.
Like I said, fascinating stuff. Video games are such a new media, especially in a place where we're identifying with graphically real people rather than dots or pixels, that it'll be very interesting to see how this kind of virtual self vs. real world self research unfolds.