Wolfshead has a nice piece on how WoW used to care about immersion and no longer does. That's a Terrible Idea has a different view, and I disagree with it so strongly (or more to the point, so subtly) that it's going to take a little while to collect my thoughts on it.

Edit: Tobold has waded in now with what seems at first glance to be an even stronger position against there being any value in what he calls immersion. Again, I disagree with him on quite what immersion is and why it's important; that response post is looking more urgent now.