Yea, people do play with other's feelings there.
People get [bless and do not curse][bless and do not curse][bless and do not curse][bless and do not curse]ed at me all the time when I tell them that SL is just a game with real people, like any other MMORPG, but with just more abilities to simulate life (or not) in it. People fuss at me because it is for them to separate their lives to say things and act like they normally would not. But, it is no more real to me than watching a movie. I just interact with other humans in SL, and I usually get the same idiots I deal with in RL.
I have gotten hurt to on the level of friendships only, since I do not do the fake romances others do on there.
Definitely a place where 90% of the fake act fake for sure and many have no problems toying with others, since they are safe behind their computers with no consequences.
I have few friends left on there. I am antisocial even online.