7 grad students met in a room and tried to grasp the differences between VW and MMOG.
We defined VW as massively multiuser virtual environments (MMVE). Examples: Second Life is a VW, but Super Mario Galaxy 2 is not. VW are free-form, open-ended, they allow more UGC than MMOG. In VW, UGC is expected and tools are given to users so that they can create content. In MMOG, new content comes from developer updates and expansions. Somehow, we managed to scratch the surface of the ludic-to-paidaic axis that Pearce talks about.
Then someone mentioned MineCraft. MineCraft has 2 different gameplay versions. In the "Classic" mode, players can only remove from or add to the world textured cubes of virtual matter. In the "Alpha" mode, monsters and zombies wander in the open world and players have health points (and can die). Hence, Classic would be a (sandbox) VW while the multiplayer Alpha would be considered an MMOG.
MMOG development studios want to provide the exact game they have playtested to their players. The virtual world is, somehow, protected: players are not allowed to modify it. Hence UGC is client-side only (eg UI add-ons for WoW). However, Game Masters can bring new and refreshing entertainment during live events such as summoning a demon in Stormwind, the Human capital city in WoW. While these events do not happen often in MMOG, they are inexistent in VW. Somehow, Game Masters could evolve into "dynamic" game designers, while traditional current game design would be considered "static".