Indeed there are projects like the mentioned above. I think the idea behind it is that people will keep most of the money virtual thus leaving the company that organised the whole thing with a lot of cash on their hands. Then the company can simply invest the money, just like banks do. It is actually possible for some very good players to make a living out of playing a MMORPG. And besides you'll always have lots of people comfortable with being at a money loss just because they enjoy the game (as it happens with ordinary MMORPG's).

I heard of second life and this Swedish project I can't remember a name of the top of my head.

There are cases of people making money of regural MMORPG's like UO. They make and uber character and then hunt for rare artifacts and sell them to other players for real money. Hey if people are willing to cash out for a Boy band CD then why wouldn't they cash out for a virtual artifact (the art value of the latter is far greater, anyway)