I have tried to get involved in a couple fantasy sims on Second Life. I come from Neverwinter Nights so battling is just built into that game. It's the sine qua non of the experience from the designers' perspective in that case.
I don't know if Second Life was originally built for battle, but a lot of people are trying various methods of making it work. The problem is that so much of Second Life is take up with making the world look pretty- and the way they do that is very taxing to your internet bandwidth- that when things like bombs, light-sabers and machineguns get involved, you really run the risk of serious lag.
A lot of people solve this problem by engaging "LARP" type systems..which means you resolve how a fight or any other contentious activity comes out by a set of rules which employ randomizations to simulate chance and modifiers for applied skill points and that sort of thing. These systems sometimes utilize animations or not, depending on those who set up the sim.
Each time I've tried to get involved in any of these sims/settings, I get frustrated because either the mechanics dont' work the way they're supposed to... ("We've been having trouble with the meter today...") or gizmos don't cooperate. (I was using my six gun to blast away at zombies but nothing happened...then I punched one and it fell apart. Talk about frustration!)
I've been totally preoccupied lately with dancing and shopping in Second Life, but I plan to devote some time to working on Second Life ass-kickery that I may report my findings to my audience. Stay tuned!