(I exclude shortcut terms such as "lol" or "brb" common to IM and other online writing)
Alt: A resident's alter-ego in SL. It is not uncommon for people to create multiple identities.
Avatar: The 3D figure who represents you in Second Life.
Basic (Account): Users of the general free account. The usage of this account has certain restriction when buying land (see Premium) or during times of high traffic.
Big Six: Linden Lab's rules of conduct, also known as the community standards. Well worth knowing; violating them can get an avatar suspended or banned from the metaverse. Intolerance, harassment, assault, disclosure, indecency, and disturbing the peace are The Big Six.
Camp/Campers: Campers are avatars who hang out at locations that pay them a few Lindens to stick around. Noobs (see below) often earn their first in-world money this way.
Estate: Estate Sim are private Sims which are purchased by individuals or companies. Those Sims are generally themed and have a certain set of rules (the convenant) which is to be obeyed at all times. The Estate owners serve as the highest authority for those private sims and are rarely overruled by Linden Labs
Furry: An avatar who appears in the form of bipedal fusion of human and animal. Nekos (see below) are not considered furries.
Gor/Gorean: A popular subculture in SL based upon the fantasy novels of John Norman. Both style and subject are not to this author's taste: the novels depict a world where, except for some female rebels, men rule women, including a subclass of female slaves. There is a vocal anti-Gorean culture in SL as well, and some areas do not permit Gorean roleplay. It's not unusual for certain types of behavior or appearance to be regulated, even though that is controversial. In fact, Cologne Cathedral in SL bans furries (see blog entry on this).
Grid: Another term for the "world" of Second Life, but this refers to the information infrastructure that supports the virtual world, a cluster of thousands of servers. I think that each Sim (see below) is run on a server of its own. Servers can go offline, thus making part of the Grid unavailable, but at times the entire Grid goes offline for service.
Griefer: A malicious avatar who tries to harm others by assault, entrapment, or harassment. They should be reported to Linden Lab with a snapshot of the "griefing," a copy of anything said, as well as a name.
Lag: A phenomenon when things slow down, sometimes drastically, in SL. An avatar may not appear to move, for instance, when commanded and then will move in one big jump. Or objects requested will only appear after a substantial delay. Slow computers, lots of avatars in an area, or many scripted items being used can cause lag.
LL: Shorthand for Linden Lab, maker of SL.
Low Prim Sim: A special type of Sim offered by Linden Labs. Those Sims only contain 4000 prims (compared to the 15000 of a full sim) and often used to connect full sims or serve as a primaryly water sim.
Machinanima: Videos produced from within games or virtual worlds. They can be well scripted, have soundtracks, and more. Cecil Hirvi, who portrays a Borg from Star Trek in Second Life, is a real-life independent filmmaker who produces machinanima in-world. South Park's brilliant "World of Warcraft" episode is an example of Machinanima.
Mainland: Mainland Sims are those regions which are operated by Linden Labs. Only the Big Six apply as rules on these Sims while owners of Parcels make up special rules for their property.
Metaverse: Term coined by Neal Stephenson for Snowcrash that inspired Philip Rosedale. Now a popular term for the "world" of Second Life.
Neko: Avatars that appear part cat, part human. A large subculture of Nekos exists in SL. It means "cat" in Japanese (thanks to Dave Cannon for telling me this!). Neko means "cat" in Japanese.
Noob, Newbie, Newcomer: You all will be. I was once, as was everyone else in SL.
OOC: Short for "out of character." Avatars role-playing in, for instance, a Star Wars setting may, to make a point as their real selves, begin a statement with "OOC."
Premium (Account): Users of paid premium accounts.Those users are able to buy Mainland properties and are not excluded during high traffic times.
Prim: The building-blocks of all objects and avatars in SL. Short for "primitive," a prim is a geometrical shape than can covered with a texture (see below), linked to other prims, and scripted.
Resident: Never "player." SL is a world with games, not a "game." Not everyone agrees about this :)
Rez: to pull an item from one's inventory and make it appear, magically, in-world
RP: Roleplay. This is SL at its most game-like. There are communities of Elves, Star-Wars and Star-Trek avatars, dragons, and, of course, a large and active adult-themed community all "in character."
Script: A Script is a bit of programmcode in LSL (Linden Labs own Scriptlanguage) which allows to create interaction with objets and avatars. Be careful when scripts actually want you to pay money when it doesn´t make sense. Those script can contain fraudulent code.
Sim or Region: A square-shaped area such as Richmond's Island. The Metaverse is made of thousands of sims. When you do a place search, usually it's by sim-name (Richmond, Info Island, Svarga).
SL: Short for Second Life.
Teleport: To move instantly from point to point on the Grid.
Texture: An image file that lets a plain prim look like, say, a brick wall or sheet of glass. Residents create their own textures but the library in your avatar's folder is full of good textures--I build my SL house/office with stock textures.
Tiny: An avatar in the form of a small animal that walks on its hind legs (CUTE CUTE CUTE!). Imagine walking stuffed animals. There is an entire community of tinies in the Raglan Shire sim. Class mentor Marcus Boo-Boo Aurelius Enoch is a tiny.