This is something Rencho Oh has been working on for some time, and here it is finally! Second Life's first iaidō game: "Iai Kiri Game Iza!!!Slash!!!" Available here.
Up to six players sit in circle, and when the !! mark shows up, hit W or the up arrow. The one who cuts the fastest is the winner. You can use any prop sword with it. (Even a banana if you like, but it is cooler with a sword, anyway.)
It's fun and trains your reflexes! :o)
Rencho provided a demo version, which will be in the north-west corner of the mall for some time.