Pseudonymity was not invented with second life. Nor even with Web and Internet. We all know that there was Norma Jeane Mortenson behind Marylyn Monroe and Samuel Clemens behind Mark Twain. It's not a practice reserved for the immortals. Most of us have a different name used by family or close friends. It's the same person, but personalities differ. We're simply not the same for different people and environments.
Name has the special meaning for each of us and changing the name, or getting a nick-name is kind of a magickal thing. That's why all those artists made new names as a part of their public personas. That's why so many monarchs got their new names when achieving the throne. Name is a tool of creation of one's self. And it doesn't affect only the public, it affects you as well. At least, that is the case if you do it right.
At the same time, being pseudonymous is a kind of hideout. We all need to change our clothes when we come home. And while you can hardly imagine Madonna sitting on the couch being comfortably bored while watching TV at home, drinking beer from the can and not caring about a pop corn that flied under the table, Louise Ciccone can feel quite relaxed doing that.
There is also another kind of hideout that we might need, at least if we enjoy carnavales and dancing under the masks. Identity, reputation and self-image are sometimes restraining us more than any chain can do. They keep us from from exploring and knowing some hidden or neglected parts of us. Or they just simply keep us from having fun, joy and fulfillment in things we are thought we shouldn't enjoy.
Masks work even if everybody knows who's behind. I remember my human's first practice with sabre. As long as I was only trying my attacks and while only my opponent had all the protective gear, I couldn't do a proper strike. I was slow, weak and hesitating. I just couldn't hit somebody with a sabre. I knew that it is not a dangerous thing to do, that I wouldn't hurt the opponent, but nevertheless.
Then I put my mask on. The next second, I was striking and hitting as mad. It was still me, I wasn't hiding or been anonimous. But I was looking through the steel net and there was no inhibition in my moves anymore. To do a good attack you have to let your impulses go, you have to feel something similar to anger. And I couldn't let that thing go out of myself until my face was covered. It's kinda paradoxical: to give full expression in action you have to hide your expression on the face. So much about all of us being more daring as avatars than as humans.
Beside these, there is one more use of pseudonyms. One that is connected to more dangerous stuff, the one that is internet-specific. It's the dark side of the Internet.