The emergence of any new educational technology is often accompanied by inflated expectations about its potential for transforming pedagogical practice and improving student learning outcomes. A critique of the rhetoric accompanying the evolution of 3D virtual world education reveals a similar pattern, with the initial hype based more on rhetoric than research demonstrating the extent to which rhetoric matches reality. Addressed are the perceived gaps in the literature through a critique of the rhetoric evident throughout the evolution of the application of virtual worlds in education and the reality based on the reported experiences of experts in the field of educational technology, who are all members of the Australian and New Zealand Virtual Worlds Working Group. The experiences reported highlight a range of effective virtual world collaborative and communicative teaching experiences conducted in members' institutions. Perspectives vary from those whose reality is the actuation of the initial rhetoric in the early years of virtual world education, to those whose reality is fraught with challenges that belie the rhetoric. Although there are concerns over institutional resistance, restrictions, and outdated processes on the one-hand, and excitement over the rapid emergence of innovation on the other, the prevailing reality seems to be that virtual world education is both persistent and sustainable. Explored are critical perspectives on the rhetoric and reality on the educational uptake and use of virtual worlds in higher education, providing an overview of the current and future directions for learning in virtual worlds.