The basic unit of exchange in World of Warcraft is the gold coin. In-game, you can earn gold by completing quests, from selling items you find, or by picking it up off the dead bodies of enemies you kill. If you want to be more sophisticated about it, you can also make a killing by buying low and selling high at the auction house.
However, you can also buy in-game gold with real world money. The current going rate, last time i checked, being $16.99 for every 1000 gold. That's about 58 gold coins for every dollar. Which isn't so far behind the Philippine Peso, really.
Most of the gold that's being sold in this manner is the result of "gold farming." In third-world countries where the price of labor is cheap, enterprising people buy a few computers, secure a fast broadband connection, and hire people to do the same things in-game over and over again. Things you wouldn't do for fun but, given enough time, are certain to generate considerable quantities of gold, especially if done on an industrial scale.
The point to all this, i think, is that even in an imaginary world it is possible to generate some very real value.
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I think this is the prevalent situation in most of the popular MMORPGs out there. I remember that when I was playing Lineage 2 on the international servers, a lot of players were very upset with Chinese players, to the point of sounding racist. According to most of the players I've talked to online, this was due to the practice of "gold-farming" as you put it, done mostly by players from China. I guess even online China provides cheap labor.
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