Linden Lab's Second Life is the prominent Virtual World platform in the market today. Virtual Worlds like Second Life are emerging to be a main stream server workload because of their popularity due to richness of 3D content and immersive social experience they can provide. So, it is very important for computer architects to fully understand this workload and its requirements. In this paper, our goal is to fully analyze the performance and to characterize the processing of Second Life server Simulator process. The simulator process has three key critical functions that dominate the performance characteristics of this workload. These are: 1) Physics engine that is responsible for simulating real world behaviors taking into account mass of the objects, gravity, wind force, etc., 2) Scripting engine that is responsible for executing scripts attached to the objects. Scripts is the main way of manipulating object behaviors (motion, color, etc.) in-world on the server, and 3) Simulator logic that is responsible for simulating the world which includes avatar movement, calculating visible areas and communicating with the clients. Our work includes performance scaling experiments, comparison of performance on Intel's Clovertown and Nehalem processor based server systems and collecting and analyzing architectural characterization data for this workload. Our measurements have shown that Intel's latest Xeon servers using Nehalem processors offer 20 to 50% performance improvement over previous generation processor based system, and that the physics computation is more compute and memory intensive. To get a better perspective of Second Life's requirements, we have compared this workload with three other popular commercial server workloads (TPC-E, SPECjAppServer and SPECjbb) and found out that this workload executes 2 to 10 times more floating point, multiply and divide instructions.