[Video Link] Blake Maloof is covering the Game Developers Conference for MAKE this week. Here's his look at the Outerra world rendering engine, which generates "massive, photo-realistic environments based on real data from Earth. All of Earth."
These sprawling vistas look completely natural because, in a sense, they are. The large scale structures of mountains, rivers, and oceans use height-map data dynamically downloaded as you explore, while the ground-level detail is procedurally generated, leaving you free to view the world as close or as far away as you desire (presumably within the limits of your processor).
The first game being built using this engine, Anteworld, presents an Earth long abandoned by humanity and tasks players with rebuilding civilization. With potential features including asynchronous content propagation (i.e. you build your city in a single player mode and it automatically loads your creations into all other players' Earths) and direct multiplayer modes, which allow you to play directly with others online, Anteworld is possibly shaping up to be the Second Life I've always dreamed of.