One innovative way that learning institutions can use Virtual Worlds, is for Training and Testing. Loyalist College has used SL in their Border Crossing Patrol Program. Students have virtual simulations for traveler interviews. This allows the college to simulate different scenarios to help train and test knowledge. Students have commented that it is easier for them to visualize the real situation rather than just verbally testing in a classroom.

The 2008 testing scores increased by 28% over the 2007 scores.

Memorial University won a national award at the Canadian Network for Innovation in Education (CNIE) conference in May, for the integration of virtual world technology in a course.  Second Life was used in a Marine Production Management course.  Students were given space on Memorial University's island in Second Life to build a shipyard that would be capable of building three vessels a year.  Students met online to walk through the shipyard and discuss the functionality and suitability of what they had built, and make a adjustments when necessary.  

This is Memorial's second award for educational technology. 

I was on the islands for USC, the Marshall School of Business uses their island for lectures and students even meet with their instructors in virtual offices.  They have shops available for students to set up their own businesses and put into practices the principals they are learning in their courses.