The term "Virtual World" is already too broad a category to handle. Second Life, Club Penguin, World of Warcraft, and MUDs all fit the category, but are very different from one another. How are they different?
Age - Kids, Teens, Adults. That's a pretty easy distinction to make. Due to the concerns about safety for kids online, the distinction between what's for adults vs kids (defined by US COPPA regs as 13 and under) is vivid. Sites either cater to this demographic or they do not. Many sites like Zwinky and Maplestory simply don't allow kids at all. Others, like Club Penquin, assume all users are under 13 and conduct themselves appropriately (a genius move, IMHO.) The line between whats for teens and adults is still very blurry, and may never be clear, not counting that which is strictly for adults.
Web vs Download - Do you have to download something special to play the game, or will it run in your browser? Browser games tend to be free and designed for quick and easy play. Games requiring a download are risking being ignored, as users are dubious of downloads and they require an extra level of patience. Available technology tends to define this category, but user expectation is a critical component in deciding what will work for which option.
Game vs Social Network - Most Virtual Worlds are both, so it's a question of emphasis. How fulfilling is the solo experience? How do users spend their time? WoW is a game. Facebook is a social network (though not really a VW.)
Navigation - How players move around in a virtual world in many ways defines the world. Club Penquin, ourWorld, and Dizzywood feature worlds created by the publisher that function as an online version of the real world. Avatars moving around is a focus of the experience. Some sites, like Faketown, feature avatars but the navigation is more like standard web navigation though the avatars can move around in some portions of the site. The fundamental experience of a virtual world is determined by the navigation choices made by the developers. If it doesn't feel like a world, it's not a virtual world, it's just a website (or game.)
There's more, but that's enough for now. If I don't understand this stuff, I can't succeed at it.