Thanks you for the great comments. I added some information because of contriibutions made by Kevin Jarrett aka KJ Hax and Brok Kalmath. They had some great vocabulary suggestions.
As I have traveled around Second Life, I have noticed my vocabulary has been increasing. There are terms and phrases that seem to turn my head every once in a while. Any new individual to Second Life, especially those teaching or students entereing, would want to become familiar with these terms so they can understand what they mean. The following is a basic small list of vocabulary used in virtual worlds:
Animation Override - an enhancement to your avatar that overrides a basic function, like walking, to make it more lifelike.
*Calling card - An inventory item you can trade with other residents. Calling cards serve as a contact list of sorts.
*Chat channel - One of over a billion pseudo-"frequencies" that objects and avatars can chat on. Avatars normally speak on channel 0, and can only hear chat on channel 0. Objects can chat and listen on any channel. For more information on chat channels go to http://secondlife.com/knowledgebase/article.php?id=116
*Derez - To remove (derez) an object from a sim within Second Life. This generally is done through deleting the object or taking the object into inventory.
Freebie - these are items is SL that are free. Some freebies are only for individuals that are in SL 30 days or less. This can be vouchers for hair from GUrl or money trees.
*Grid - The world of Second Life is sometime referred to as a "grid" or "the grid". One grid is what other virtual worlds may call one world or one "shard". All visible islands and regions on a map are included in the term "grid".
Griefer – People who go around in Second Life and grief other avatars. It might be caging, shooting, etc. that is unexpected and not asked for; a form of terrorist attack on your avatar. Does not do harm and is more of a nuisance.
*Infohub - A Linden-owned location inworld. Infohubs used to be telehub centers for Second Life.
*Inworld - 1) Anything that takes place within the virtual environment of Second Life. 2) The state of being logged into Second Life.
*L$ - A Linden dollar (L$, "LindenBucks", or "Lindens") is the inworld Virtual Currency used in Second Life. Most transactions you make inworld with other residents will be made in L$.
*Lag, Laggy - 1) The delay inherent to a connection between two computers on the Internet, especially an unusually long delay between a client and a server. 2) A delay or interruption in a network or Internet connection caused by slow response times and/or lost or missing data. 3) (technically incorrect but popular usage) Slow or jerky performace in a 3D application caused by an overworked processor, memory bandwidth, video card, or hard drive. 4) (technically vague popular usage) Any situation where part of the Second Life experience is not performing as desired. http://secondlife.com/knowledgebase/article.php?id=273
Machinima - Machine Animation or Machine Cinema, the art of creating movie-quality animations and other cool effects in SL.
*Mature - Second Life uses a rating system for sims to let the user know what type of content/behavior to expect in that area. Mature or (M) regions may include (among other things) profanity, nudity, and sexual content. The Second Life Community Standards still apply in these areas, so discretion is still recommended.
*Mouselook – Mouselook is the first-person camera view in SL, as seen from the eyes of the avatar. When in this mode the mouse is used to move the camera around, hence the name. Mouselook is often used for weapons, vehicles, and grabbing objects.
Mule - the use of an avatar for carrying inventory items not used a lot by the main avatar. A Mule avatar is also used in many instanced to experiment with looks HUDs, skins, shapes, etc.
*Newbie - (popular usage) A newcomer to Second Life; a resident who has joined for a relatively short period of time and/or is not familiar or comfortable with Second Life's nuances. Also spelled 'noob' or 'n00b'.
*Notecard - A small text file within Second Life. You can embed pictures, landmarks, and even objects inside notecards.
*Primitive/Prim - The basic building block of Second Life, also called a 'prim'. All in-world objects are constructed from primitives. A prim is a basic shape (such as a box, sphere, cylinder, etc.) that can be manipulated, stretched, cut, twisted, hollowed, and otherwise mangled into various forms. A builder can link a collection of prims together to form one cohesive object. The math works out to 15,000 prims for each 65,536 m2. So for example, a 512 m2 parcel has 117 prims, a 4096 m2 parcel has 937.
*Region - A named area within Second Life, also commonly referred to as a simulator or a sim. Second Life is divided into square regions, each 256m on a side and assigned a name. The regions are aligned and assembled so that the borders between them are, for all intents and purposes, seamless. You can stand a one side of a region border, with your friend on the other. Despite the fact that the two of you are in different regions, you can chat freely, throw a baseball across, even drive a car back and forth, without interruption. Current limit to a region is of 65536 m2 (256m x 256m)
Sim – Sims in Second Life are characterized by the area. Generally, 25 -30 active avatars can be in a sim before it lags or slows down. Avatars that are observing or watching can be between 50 and 75 in a sim before it lags. There may be multiple sims in a region.
SLURL - a link you can click on in a web browser that takes you to a particular place in SL. A Slurl is made up by the following format: http://slurl.com/secondlife/region/xcoordinate/ycoordinate/zcoordinate Anyone can make an Slurl with this formula.
*Telehub - (deprecated) A centralized teleport location in Second Life. When using a telehub in Second Life, you arrived at the closest telehub to your intended location. You could then fly to your destination from there. Telehubs are no longer in Second Life; you can teleport directly to your destination.
*Teleport - To instantly travel to a location (as opposed to manually walking or flying there). Residents can teleport via the map, with landmarks, or through invitations given by other residents.* Actual definition from http://secondlife.com/knowledgebase/index.php?action=glossary
As new vocabulary appears in Second Life, I will update this page. Please feel free to comment to add other vocabular or email me at firstname.lastname@example.org to add vocabulary you feel is a must for SL classrooms.