Just last week I picked up on the enormous amount of interest that is being generated by machinima. Very loosely, machinima is making films using the engines and techniques of games. So, instead of using the very expensive 3D rendering tools used by Hollywood, machinima directors use the 3D rendering tools of games like Oblivion. The word machinima may be a contraction of machine cinema or machine animation - or it may not!
If you want to start playing with this, then the fine folk at Wiley have released "Machinima for Dummies", I spotted this book in BoingBoing.
To get an idea of what people are doing with machinima here are two YouTub clips.
First, a machinima clip as an advert for what you can do in Second Life
Secondly, a trainler for Chuck Norris in Oblivion